Ethnic Fractionalization and the Demand for Redistribution – Potential Implications for the Nordic Model

A distinctive feature of the Nordic model is that economic resources are redistributed between citizens to a high degree. Historically, the Nordic voters have expressed a higher demand for such redistribution than people in other parts of the world. This paper considers the factors that determine individual preferences for redistribution, giving special attention to heterogeneity in the form of ethnic fractionalization. Such heterogeneity is generally linked to reductions in demand for redistribution. The paper takes as its starting point the fact that the populations in all the Nordic countries are, to varying degrees, becoming increasingly heterogeneous. Potential mechanisms for why this may have a negative impact on demand for redistribution, and potential consequences for the Nordic model are discussed.