Power Resources, Macro Policy, and Redistribution in the United States.

This paper addresses the functioning of the governing system of the United States by analyzing distributional outcomes from 1947-2000. The key question of this paper is whether public policy influences distributional outcomes. The macro politics model of the U.S. governing system (Erikson, MacKuen, and Stimson 2002) and the power resources theory of welfare policy (Huber, Ragan, and Stephens 1993) suggest that left policies should equalize the distribution of income. I utilize single equation error correction models to assess the impact of policy on income inequality through two mechanisms ? market distortions and redistribution. Since nearly every government action influences markets in some way, I examine policy in the aggregate rather than focusing only on policies explicitly designed to redistribute income. The analysis indicates that policy influences inequality through both mechanisms, with left policy producing more equality. The results are consistent with power resources theory and strongly support the macro politics model by demonstrating that political choices are an important determinant of distributional outcomes. Furthermore, I find that market distortion is as important as, and works in tandem with, explicit redistribution. [ABSTRACT FROM AUTHOR]