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Reciprocity, Self-Interest and the Welfare State

In the advanced economies, a substantial fraction of total income is regularly transferred from the better off to the less well off, with the approval of the electorate. Economists have for the most part misunderstood this phenomenon due to their endorsement of an empirically implausible theory of selfish human motivation. Understanding why citizens regularly vote for parties endorsing redistributive policies requires a reconsideration of the behavioral assumptions of economics. We find that voters support the welfare state because it conforms to deeply held norms of reciprocity and conditional obligations to others.