How does a liberalizing market influence a synergy between redistribution preference and social preferences in Asian socio-economies?

Abstract

Asian people may demand more social welfare or greater redistributive expenditure because they are currently faced with problems of growing economic inequality and a state of social development that is lagging far behind its state of economic development. However, they do not seem to be in favor of demanding more welfare expenditure. This paper investigates how individual attitudes toward redistribution are shaped by focusing on institutional dependency and social preference to address this paradoxical issue. First, we show that social preferences are more relevant to redistribution preference than self-interested motives in Asian socio-economies. We also argue that a synergy between trustworthy individuals and a social preference space could work, leading to a stronger preference for redistribution. However, for the second, we show that the degree to which redistribution preference is associated with social preferences could be lowered as the market space is liberalized: in other words, a social preference space contracts. As a result, we cannot expect a synergy between a social preference space and trustworthy individuals to work, leading to a paradoxical situation, i.e., Asian people refrain from demanding that the government should undertake more redistributive expenditure despite their exacerbating income inequality, caused by the expansion of a liberal type of market space.