| Summary: | <p>Despite considerable research efforts, the relationship between inequality and demand for redistribution remains a highly contested topic within comparative political economy. This paper argues that a central yet widely overlooked mechanism linking macro-level income inequality to preferences for redistribution has to with the micro-level implications of certain externalities of inequality. Focusing on fear of crime, as one such externality, I argue that because (i) in- equality and crime are positively related, and (ii) because crime and fear of crime have a negative effect in individual utility, it follows that increasing in- equality should have a positive effect on support for redistribution. Importantly, however, the argument of this paper also recognises that redistribution is but one of several means through which a concern about crime can be addressed, with the most relevant alternatives being increased policing and harsher punitive measures. Drawing on literatures in criminology and political sociology, I theorise that a key determinant of this choice | between redistribution and policing/punishment as alternative approaches to dealing with crime | is the level of ethnic heterogeneity in the population. Taken together, therefore, this paper's argument implies that inequality will have differential effects on support for redistribution in different contexts: in cases where the population is homogenous, fear of crime - and by consequence inequality - will boost demand for redistribution, whilst no such effects will follow in contexts of high heterogeneity. Using a two-step statistical methodology, I analyse Eurobarometer and ESS data from 21 OECD countries and find persuasive empirical support for my theoretical expectations. Fear of crime is more strongly associated to support for redistribution when the level of population heterogeneity remains low, whilst the opposite holds true for the relationship between fear of crime and support for policing and punishment.</p>
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