What is Director's law in simple terms?

Government redistribution benefits the middle class, with its many voters, more than the poor.

Why does the middle class benefit?

It is numerous and votes often, so politicians follow its preferences.

Director's Law

📈 Economics By CampusDown Wiki Editorial Team Last updated October 27, 2026

Director's law holds that in democracies government redistribution favours the middle class more than either the poorest or the richest. It was voiced by economist Aaron Director and set out by George Stigler in a 1970 article.

Contents

1. Concept
2. Explanation
3. Evidence and critiques
4. FAQ
5. References

Concept

Stigler (1970) formalised Chicago economist Aaron Director's idea that public expenditures are made primarily for the middle classes and financed by taxes borne considerably by the poor and the rich. Free higher education, pensions and housing support are common examples.

Explanation

By the median voter theorem, the middle voter decides policy. The numerous, high-turnout middle class can form shifting coalitions with the poor or rich to secure favourable transfers. Tullock (1971) argued redistribution flows to the politically powerful, and Meltzer and Richard (1981) modelled government size via the median voter, a classic public choice insight.

Evidence and critiques

Peltzman (1980) linked equalisation of middle incomes to government growth, Goodin and Le Grand (1987) showed the middle classes benefit greatly from the British welfare state, and Lindert (2004) traced middle-class interests in social spending history. It is discussed with Wagner's law, while the paradox of redistribution reinterprets middle-class inclusion as reducing poverty.

FAQ

What is Director's law in simple terms?: Government redistribution benefits the middle class, with its many voters, more than the poor.
Why does the middle class benefit?: It is numerous and votes often, so politicians follow its preferences.

Sources reviewed: 2026-10-26

References

Stigler, G. J. (1970). Director's law of public income redistribution. The Journal of Law and Economics, 13(1), 1–10. The original statement of Director's law.
Tullock, G. (1971). The charity of the uncharitable. Economic Inquiry, 9(4), 379–392. Redistribution favouring the middle, not the poor.
Peltzman, S. (1980). The growth of government. The Journal of Law and Economics, 23(2), 209–287. Income distribution and government growth.
Meltzer, A. H., & Richard, S. F. (1981). A rational theory of the size of government. Journal of Political Economy, 89(5), 914–927. The median voter and the size of government.
Mueller, D. C. (2003). Public choice III. Cambridge University Press. A comprehensive public choice textbook.
Goodin, R. E., & Le Grand, J. (1987). Not only the poor: The middle classes and the welfare state. Allen & Unwin. The middle classes and the welfare state.
Lindert, P. H. (2004). Growing public: Social spending and economic growth since the eighteenth century. Cambridge University Press. Economic history of social spending.

Reports and materials that use this theory (Korean)

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Median Voter TheoremWhat the median voter theorem states, Black's proof, Hotelling's location model and Downs's two-party convergence, cycling in multidimensional space (McKelvey), size-of-government models, empirical evidence and critiques.🏛️ Politics & Public Administration Wagner's LawWhat Wagner's law is: the hypothesis that public spending grows faster than national income as economies develop, Wagner's three explanations, Peacock and Wiseman's displacement effect, links to Baumol's cost disease, and the empirical debate.📈 Economics Public Choice TheoryWhat public choice theory is, its origins in Wicksell, Black, Arrow and Downs, Buchanan and Tullock's The Calculus of Consent, the median voter theorem, rent seeking, Niskanen's bureaucracy model, regulatory capture, constitutional economics, government failure and major critiques.🏛️ Politics & Public Administration Paradox of RedistributionWhat the paradox of redistribution is: Korpi and Palme's finding that the more benefits are targeted at the poor, the less redistribution and poverty reduction is achieved. Covers its mechanism and later debates.🤝 Social Welfare

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This article was last updated on October 27, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.