Income inequality and election outcomes in OECD countries: New evidence following the Great Recession of 2008–2009

Using data on national parliamentary election outcomes in 32 OECD countries from 1975 to 2013, we investigate the importance of economic voting. We focus on the relevance of income inequality which has resurfaced to the forefront of public debate since the last global economic downturn. Additionally, we examine whether the degree of economic voting varies with the political orientation of the incumbent government. Finally, we check whether the Great Recession of 2008–2009 alters the degree to which voters hold the incumbent government, specifically left parties, responsible for poor economic performance and rising inequality. We find that economic growth is the most robust variable for economic voting, before and after the Great Recession. The vote share for left-leaning parties declines when income inequality rises during normal economic times. However, voters are more likely to vote for left-wing incumbents if domestic income inequality and unemployment rate rose during the Great Recession.     

Being unequal and seeing inequality: Explaining the political significance of social inequality in new market democracies

Market economies inevitably generate social inequalities, of which the new democracies of Central and East European (CEE) societies have seen dramatic – though widely diverging – levels of growth. Do CEE citizens believe that inequality is excessive and, if so, why? And what is the connection between perceptions of social inequality and citizens' views of new markets and democracy? These questions are addressed using new data from mass surveys conducted in 2007 in 12 post‐communist CEE states. Surprisingly weak links are found between social inequality perceptions and national‐level measures of inequality as well economic, social and political conditions. Perceptions of social inequality are mainly driven by individual‐level assessments of market and democratic performance, but not by market or democratic ideals.     

Who does better for the economy? Presidents versus parliamentary democracies

Are certain forms of government associated with superior economic outcomes? This paper attempts to answer that question by examining how government systems influence macroeconomic performance. We find that presidential regimes consistently are associated with less favorable outcomes than parliamentary regimes: slower output growth, higher and more volatile inflation and greater income inequality. Moreover, the magnitude of the effect is sizable. For example, annual output growth is between 0.6 and 1.2 percentage points lower and inflation is estimated to be at least four percentage points higher under presidential regimes relative to those under parliamentary ones. The difference in distributional outcomes is even starker; income inequality is 12 to 24% worse under presidential systems.     

Ethnic Inequality and the Strength of Ethnic Identities in Sub-Saharan Africa

Ethnic inequality has been argued to have numerous pernicious effects. Among other things, scholars have argued that it breeds political violence, destabilizes democracy, and impedes economic development. While the arguments developed by these literatures implicitly assume that ethnic inequality increases the degree to which individuals identify with their ethnicity, this assumption has yet to be tested empirically at the individual-level. This paper argues and empirically demonstrates that between-ethnic group inequality does strengthen ethnic identities. However, we also find that the magnitude of its effect weakens as inequality within ethnic groups increases. That is, individuals identify most strongly with their ethnic identity when ethnicity is reinforced by economic inequality. Using the Afrobarometer, we provide the first cross-national empirical test of the effect of ethnic inequality on the strength of ethnic identities at the individual-level. Our dataset covers 21 sub-Saharan African countries and 85 ethnic groups. Results strongly support our hypothesis.     

An economic or political Kuznets curve?

This paper examines two closely related empirical hypotheses: an economic Kuznets curve and a political Kuznets curve. We find a robust inverted-U relationship between income inequality and political development, but not one between income inequality and economic development. Exploring the cross-section aspect of the panel data, we find that the economic Kuznets curve is sensitive to different control specifications and to different functional specifications, but the political Kuznets curve is robust. Using dynamic panel data estimation, we find that the economic Kuznets curve does not hold up intertemporally while the political Kuznets curve does.     

Rent-seeking,political influence and inequality: A simple analytical example

A simple model allowing an analysis of the interaction between economic policy decisions and rent-seeking by private agents competing for political influence, is developed. Rent-seeking may be of the directly unproductive type, requiring resources that are withdrawn from productive activities, or it may manifest itself as income transfers (corruption) to political decisionmakers. In the political-economic equilibrium of the model the extent of rent-seeking, economic policy decisions, income inequality, etc. are endogenously determined.     

Income inequality and party (de)polarisation

Scholars of US politics report a strong connection between income inequality and party polarisation. This study evaluates this relationship comparatively, and finds that the opposite association holds outside the United States, namely, that increasing inequality depolarises political parties’ economic positions. High levels of inequality change the composition of the core constituencies on the left and depress the participation of low-income voters, leaving left-wing parties with less support when they adopt distinct leftward positions. At the same time, inequality does not create strong incentives for right-wing parties to move further rightward. Therefore, income inequality leads to party systems that are depolarised on economic issues. The results have implications for our understanding of political representation, economic inequality, and political polarisation.     

Economic Inequality and Intolerance: Attitudes toward Homosexuality in 35 Democracies

Using hierarchical linear models fitted to data from the World Values Survey and national statistics for 35 countries, this article builds on the postmaterialist thesis by assessing the impact of economic inequality across and within nations on attitudes toward homosexuality. It provides evidence that tolerance tends to decline as national income inequality rises. For professionals and managers, the results also support the postmaterialist argument that economic development leads to more tolerant attitudes. On the other hand, attitudes of the working class are generally less tolerant, and contrary to expectations of the postmaterialist thesis, are seemingly unaffected by economic development. In other words, economic development influences attitudes only for those who benefit most. These findings have political implications, suggesting that state policies that have the goal of economic growth but fail to consider economic inequality may contribute to intolerant social and political values, an attribute widely considered detrimental for the health of democracy.     

Polarization,Politics and Property Rights: Links Between Inequality and Growth

We argue that social polarization reduces the security ofproperty and contract rights and, through this channel,reduces growth. The first hypothesis is supported by cross-country evidence indicating that polarization in the form ofincome inequality, land inequality, and ethnic tensions isinversely related to a commonly-used index of the security ofcontractual and property rights. When the security of propertyrights is controlled for in cross-country growth regressions,the relationship between inequality and growth diminishesconsiderably. This and other evidence provides support for oursecond hypothesis, that inequality reduces growth in partthrough its effect on the security of property rights.     

To have or not to have: Effects of economic inequality on turnout in European democracies

The effect of economic inequality on turnout has received considerable interest recently. Some studies suggest that inequality depresses turnout, others that the relationship is either the other way around or simply non-existent. Employing a large dataset with some 80,000 respondents from 30 European democracies, we show that great care is required when exploring inequality and turnout. On average, there is indeed a negative/positive effect of being below/above the median income in a country – but it is conditioned by inequality (measured as the Gini coefficient) and national wealth (measured as GDP per capita). Moreover, the two country-level factors interact in surprising ways. Based on our results we warn against claims of mono-causal relationships between the economic situation of voters and turnout.     

The Political Implications of American Concerns About Economic Inequality

This article presents a national measure of Americans’ level of concern about economic inequality from 1966 to 2015, and analyzes the relationship between this construct and public support for government intervention in the economy. Current research argues that concerns about economic inequality are associated with a desire for increased government action, but this relationship has only been formally tested using cross-sectional analyses. I first use a form of dynamic factor analysis to develop a measure of national concern over time. Using an error correction model I then show that an increase in national concern about economic inequality does not lead to a subsequent increase in support for government intervention in the economy. Instead there is some evidence that, once confounding factors are accounted for, an increase in concern could lead to reduced support for government intervention.     

Economic inequality,winner-loser gap,and satisfaction with democracy

This study analyzes how economic inequality affects electoral winners and losers' satisfaction with democracy. We posit that both the poor and the rich have more at stake in elections when inequality is high. Electoral losers, whether they are the poor or the rich, are more likely to be dissatisfied with democratic systems when facing greater disparity in wealth. In contrast, electoral winners confronting higher inequality are more likely to express satisfaction with democracy. Employing a multilevel analysis of Comparative Study Electoral Systems (CSES) data, we find that the gap in satisfaction with democracy between electoral winners and losers widens as income inequality increases. Broadening the conventional wisdom that electoral systems mediate the effect of citizens' winner-loser status on their democratic attitudes, we demonstrate that the mediating effects of economic inequality are more critical than the institutional effects.     

Inequality and voting among deprived ethnic groups: evidence from India

ABSTRACT

What are the conditions that determine the electoral success of parties that champion deprived ethnic groups? What is the impact of within-group inequality on this outcome? Existing arguments focus on the role of institutions or the relationship between ethnicity and other social cleavages. This paper contributes to the second approach by studying the impact of within-group as well as between-group inequality on ethnic voting. We use elections to state legislatures within India to control for institutional and historical factors that may influence ethnic voting. Using data from the National Sample Survey, we calculate inequality in consumption expenditure. We show that high within-group economic inequality among deprived ethnic groups hinders the electoral success of parties that champion these groups, whereas high between-group economic inequality has the opposite effect. Our findings also identify a potential causal mechanism (preference heterogeneity) that might link within-group inequality to ethnic voting.     

Durable Democracy? Economic Inequality and Democratic Accountability in the New Gilded Age

Political Behavior - Scholarship in the U.S. provides mounting evidence of a linkage between economic inequality and inequality in representation and policymaking. In response, this article...     

Does economic inequality undermine political equality? Testing two common assumptions

In recent years, scholars have expressed concern that democratic political systems are more responsive to rich citizens than to poor citizens under conditions of economic inequality. However, it is unclear whether economic inequality leads to unequal influence on government. Moreover, despite claims that proportional representation reduces inequalities in representation, there is no evidence that it does. I test these two prominent claims by connecting two types of citizens’ preferences to the composition of government in non-presidential systems using the Comparative Study of Electoral Systems (CSES) dataset. I find that rich citizens gain better representation in government than the poor more often than the reverse. However, I find no evidence of an association between economic inequality and inequalities in representation or that proportional representation influences income gaps in representation.     

Interrogating sub-Saharan Africa's high economic growth rate and low poverty reduction rate: A poverty paradox?

Sub-Saharan Africa's (SSA) high economic growth coincides with an increase in the level of poverty. In a panel of 40 SSA countries over a 30-year period, while accounting for the potential spillover effect of poverty in the region. The study found that economic growth recorded over the years has not translated to poverty reduction, particularly, in resource-rich economies of SSA. The result also shows that income inequality worsens the effect of economic growth on poverty and that the poverty-reducing effectiveness of growth varies considerably across sectors, across space, and over time. The research findings suggest that governments across the region, particularly, in oil-exporting countries in SSA must diversify the economy away from oil (toward the service sector) to reduce poverty in the region.     

Inequality,the Crash and the Ongoing Crisis

The rise in inequality across many rich nations, but especially in the United Kingdom and the United States, was meant to lead to a bigger economic pie from which all would benefit. In fact, the increased concentration of income over the last three decades has led to more fragile and unstable economies making it a key cause of the 2008 Crash and today's lack of recovery. The evidence of the last 100 years is that models of capitalism that fail to share the proceeds of growth more evenly will eventually self‐destruct. More equal societies have softer business cycles. In contrast, more unequal economies are associated with more extreme cycles—they have exaggerated booms, deeper falls and extended troughs. The scale of inequality is not just an issue about fairness and proportionality, it is therefore integral to economic health.     

Is gender on the 'new agenda'?

Abstract. This paper examines the politicization of gender inequality through a cross-national analysis of attitudes towards inequality between men and women. The data were obtained from national surveys in the United States, Britain, West Germany, Australia and Italy. In all of these countries, attitudes towards gender inequality were found to be associated with the 'left-right' cleavage over economic inequality and redistribution, but they were unrelated to 'new politics' issues. It was also found that attitudes towards gender inequality were more closely integrated into the left-right cleavage in those countries where there was greater awareness of gender issues, and that they had very little net impact on partisanship. Thus high levels of awareness of gender inequality are not associated with the emergence of a new cross-cutting political cleavage. It is concluded that inequality of opportunity between men and women does not constitute part of a new politics agenda, nor does it cross-cut other sources of political interests. It is more plausibly seen as a new element of the well-established left-right cleavage. Consequently, it leaves the structure of political divisions relatively intact.     

Maintaining Perspective on the Economic Issues of Today

As the new administration takes office it is important to maintain some perspective on the economicchallenges facing the nation. The situation is far better today than when President Obama took office in2009 and 2013. Unemployment is close to pre-Great Recession levels, incomes are rising and poverty ratesfalling. We face economic challenges but the most important ones are not international trade or immigration.Sluggish economic growth, a fiscal crisis in our entitlement programs, high inequality in incomes andwealth, and climate change are what should demand our attention.     

Inequality,Diversity and Social Trust in Norwegian Communities

This article examines community effects on social trust in Norwegian communities. The large research literature on social trust agrees that community effects are important, but disagree about which aspects of communities influence social trust. The main current disagreement concerns the relative importance of ethnic diversity and socio-economic factors, such as income inequality within communities and differences in socio-economic standing between communities. We test the competing propositions on a Norwegian dataset consisting of 99 communities and 6,166 survey respondents within those communities arguing that it is particularly interesting to look at the relationship between diversity and social trust in the setting of a wealthy universalist welfare state. It is to our knowledge the first dataset that allows a hierarchical analysis of the determinants of social trust in the Norwegian context. The results of our models show that economic inequality, within and between communities, has a direct negative effect on social trust, but that it is not possible to separate the effects of ethnic diversity and level of unemployment. This study thus lends support to the body of research that first and foremost emphasizes the role of economic inequality in accounts of community differences and social trust.