This paper models balanced-budget redistribution between socio-economic groups as the outcome of electoral competition between two political parties. The authors, Assar Lindbeck and Jörgen W. Weibull, from the Institute for International Economic Studies at the University of Stockholm, explore the conditions under which such equilibria exist, emphasizing the importance of "stochastic heterogeneity" in party preferences among voters. They examine the validity of Hotelling's "principle of minimum differentiation" and "Director's Law" under different hypotheses regarding administrative costs and voter behavior. The paper contrasts the strategy of expected-plurality maximization with the strategy of maximizing the probability of gaining a plurality. It assumes fixed and known incomes, allowing for lump-sum taxation and constraints on tax/transfer differentiation within groups. The study focuses on the interaction between voters and parties, where both aim to maximize their own welfare through the selection of fiscal redistribution policies.This paper models balanced-budget redistribution between socio-economic groups as the outcome of electoral competition between two political parties. The authors, Assar Lindbeck and Jörgen W. Weibull, from the Institute for International Economic Studies at the University of Stockholm, explore the conditions under which such equilibria exist, emphasizing the importance of "stochastic heterogeneity" in party preferences among voters. They examine the validity of Hotelling's "principle of minimum differentiation" and "Director's Law" under different hypotheses regarding administrative costs and voter behavior. The paper contrasts the strategy of expected-plurality maximization with the strategy of maximizing the probability of gaining a plurality. It assumes fixed and known incomes, allowing for lump-sum taxation and constraints on tax/transfer differentiation within groups. The study focuses on the interaction between voters and parties, where both aim to maximize their own welfare through the selection of fiscal redistribution policies.