Modeling Korpi and Palme’s ‘Paradox of Redistribution and Strategies of Equality'
Summary
A new book entitled Feedback Economics: Economic Modeling with System Dynamics is the first comprehensive collection of the variety of ways system dynamics thinking can be applied to economic matters.
The book enriches contemporary economic debate by shedding light on the feedback dynamics in economic systems that are often neglected, enabling the linking of economic and sustainability issues.
Centre researcher David Collste contributed a chapter, exploring a feedback theory of redistribution presented in one of the most influential papers in the history of social policy: Korpi and Palme’s ‘The Paradox of Redistribution and Strategies of Equality’ (1998). According to the theory, countries with higher degrees of low-income social policies end up with higher degrees of poverty and inequality. This is a result of a feedback between the social policy design and the electorate’s support for an encompassing welfare state. In his book chapter, David Collste confirms the theory’s claim by presenting a simulation model that makes this counterintuitive outcome explicit.
