Two decades after Korpi and Palme's paradox of redistribution: What have we learned so far and where do we take it from here?

Abstract

Over two decades ago, Korpi and Palme (1998) published one of the most influential papers in the history of social policy discipline, in which they put forward a paradox of redistribution: The more countries target welfare resources exclusively at the poor, the less redistribution is actually achieved and the less income inequality and poverty are reduced. The current paper provides a state-of-The-Art review of empirical research into that paradox. More specifically, we break down the paradox into seven core assumptions, which together form a causal chain running from institutional design to redistributive outcomes. For each causal assumption, we offer a comprehensive and critical review of the relevant empirical literature, also including a broader range of studies that do not aim to address Korpi and Palme's paradox per se, but are nevertheless informative about it.