Burden Sharing in Deficit Countries: A Questionnaire-Experimental Investigation

Background for this study on how to share a burden is the most recent economic situation in several countries in Southern Europe and in Ireland. These countries were forced to introduce severe budget cuts after the collapse of Lehman Brothers in 2008 which had unleashed a financial crisis in many industrialised countries of the Western world. We do not ask how the burden was actually split in each country examined but how the burden should have been shared among different income groups of society. In order to answer this question, a questionnaire-experimental investigation was run among students from Cyprus, Greece, Ireland, Italy, Portugal, and Spain. Our study offered the students seven different schemes of taxation amongst which we had specified a proportional rule and two progressive schemes of differing severity. A key result within our investigation is the finding that a large majority of students in all countries involved did not opt for a proportional rule of burden sharing but picked one of the two progressive schemes instead. The other rules received only minor support.

Wulf Gaertner is professor emeritus at the University of Osnabrück, Germany, and Visiting Professor at LSE. He had been one of the managing editors of the Springer journal “Social Choice and Welfare”. His areas of research are microeconomics in general and social choice theory in particular. He published several books at CUP and OUP.

Lars Schwettmann studied Economics at the Universities of Birmingham and Osnabrück. From 2001 until 2008 he was a doctoral researcher at the University of Osnabrück. He is currently completing his habilitation at the Martin Luther University Halle-Wittenberg. His main research interests are empirical social choice, theories of distributive justice, health economics, and prioritizing in medicine.

Seminar organised by the Group Decision Making research cluster.