Democracy, Inequality, and Representation in Comparative Perspective

Democracy, Inequality, and Representation in Comparative Perspective

Pablo Beramendi
Christopher J. Anderson
Copyright Date: 2008
Published by: Russell Sage Foundation
Pages: 448
https://www.jstor.org/stable/10.7758/9781610440448
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    Democracy, Inequality, and Representation in Comparative Perspective
    Book Description:

    The gap between the richest and poorest Americans has grown steadily over the last thirty years, and economic inequality is on the rise in many other industrialized democracies as well. But the magnitude and pace of the increase differs dramatically across nations. A country’s political system and its institutions play a critical role in determining levels of inequality in a society. Democracy, Inequality, and Representation argues that the reverse is also true—inequality itself shapes political systems and institutions in powerful and often overlooked ways. In Democracy, Inequality, and Representation, distinguished political scientists and economists use a set of international databases to examine the political causes and consequences of income inequality. The volume opens with an examination of how differing systems of political representation contribute to cross-national variations in levels of inequality. Torben Iverson and David Soskice calculate that taxes and income transfers help reduce the poverty rate in Sweden by over 80 percent, while the comparable figure for the United States is only 13 percent. Noting that traditional economic models fail to account for this striking discrepancy, the authors show how variations in electoral systems lead to very different outcomes. But political causes of disparity are only one part of the equation. The contributors also examine how inequality shapes the democratic process. Pablo Beramendi and Christopher Anderson show how disparity mutes political voices: at the individual level, citizens with the lowest incomes are the least likely to vote, while high levels of inequality in a society result in diminished electoral participation overall. Thomas Cusack, Iverson, and Philipp Rehm demonstrate that uncertainty in the economy changes voters’ attitudes; the mere risk of losing one’s job generates increased popular demand for income support policies almost as much as actual unemployment does. Ronald Rogowski and Duncan McRae illustrate how changes in levels of inequality can drive reforms in political institutions themselves. Increased demand for female labor participation during World War II led to greater equality between men and women, which in turn encouraged many European countries to extend voting rights to women for the first time. The contributors to this important new volume skillfully disentangle a series of complex relationships between economics and politics to show how inequality both shapes and is shaped by policy. Democracy, Inequality, and Representation provides deeply nuanced insight into why some democracies are able to curtail inequality—while others continue to witness a division that grows ever deeper.

    eISBN: 978-1-61044-044-8
    Subjects: Political Science, Sociology, Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. About the Authors
    (pp. vii-viii)
  4. Acknowledgments
    (pp. ix-xii)
  5. PART I THE CONTEXT

    • Chapter 1 Income Inequality and Democratic Representation
      (pp. 3-24)
      Pablo Beramendi and Christopher J. Anderson

      Similar concerns haunt academics and policy makers throughout the old world as recent scholarship suggests that excessive inequalities attack the foundations of democratic political regimes (Acemoglu and Robinson 2006; Boix 2003) and the distributive consequences of markets become increasingly unequal. But these long-standing and unresolved debates have received renewed attention in recent years. Thus, in an essay entitled “The Rich, the Poor, and the Growing Gap Between Them,”The Economistrecently commented on the growing gap in the United States between rich and poor by recalling John F. Kennedy’s saying that “a rising tide lifts all boats.” The essay goes...

    • Chapter 2 Inequality Patterns in Western Democracies: Cross-Country Differences and Changes over Time
      (pp. 25-61)
      Andrea Brandolini and Timothy M. Smeeding

      There is some intuitive appeal in the idea that democracy is associated with a more equal distribution of income. By allowing for a better representation of the interest of the poorest classes in the society, democratic institutions may be instrumental in the adoption of progressive redistributive policies. Thus, in his celebrated model of an inverted-U relationship between income inequality and economic development, Simon Kuznets explained the falling part of this relationship by observing that, “in democratic societiesthe growing political power of the urban lower-income groups led to a variety of protective and supporting legislation, much of it aimed to...

    • Chapter 3 Social Rights, Welfare Generosity, and Inequality
      (pp. 62-90)
      Lyle Scruggs

      Comparative analyses of welfare state reform have relied overwhelmingly on public spending as the indicator of program commitment and change.¹ Yet many welfare state scholars have long criticized the use of this type of data, emphasizing the importance of nonspending features of welfare state institutions for understanding the impact of national social programs. Despite this criticism, large-n comparative analyses of welfare state dynamics using alternative institutional measures of the national welfare state are surprisingly rare. Such alternatives are essential to any accurate assessment of the extent and impact of contemporary policy reform.

      The Comparative Welfare Entitlements Dataset (CWED) is intended...

  6. PART II HOW DEMOCRATIC POLITICS SHAPES INEQUALITY

    • Chapter 4 Electoral Institutions, Parties, and the Politics of Class: Explaining the Formation of Redistributive Coalitions
      (pp. 93-126)
      Torben Iversen and David Soskice

      There is considerable variation in the extent to which governments redistribute income, and there is broad agreement that the explanation for such redistribution lies in the design of political institutions and partisan responses to inequality (see also the chapters by Brandolini and Smeeding, Beramendi and Cusack, and Rueda, this volume). But just how politics shapes distributive politics is still not well understood. Allan Meltzer and Scott Richard’s (1981) political economy model of redistribution, which is the best known, captures the key intuition that democratic institutions empower those who stand to benefit from redistribution and that redistribution is greater the more...

    • Chapter 5 Economic Institutions, Partisanship, and Inequality
      (pp. 127-168)
      Pablo Beramendi and Thomas R. Cusack

      There is a “transatlantic consensus” on the recent developments in economic inequality (Atkinson 1999). This is the widely shared view that the waxing wage and income inequality seen in the principal Anglo-Saxon countries during the last decades is also reflected in similar rises within most other developed economies. Wages and salaries have grown ever more disparate as the skill premium ineluctably increases (Nickell and Bell 1996; see also Gottschalk and Smeeding 1997). In turn, as capital reaps ever greater rewards, those who depend on their own labor are losing out in both absolute and relative terms (Phillips 2002). And, finally,...

    • Chapter 6 Political Agency and Institutions: Explaining the Influence of Left Government and Corporatism on Inequality
      (pp. 169-200)
      David Rueda

      It is well known that wage inequality has increased dramatically in the United States over the last three decades. From 1973 to 1998, the hourly earnings of a full-time worker in the ninetieth percentile of the American distribution (someone whose earnings exceeded those of 90 percent of all workers) relative to a worker in the tenth percentile grew by 25 percent, and the corresponding figure for men only was nearly 40 percent. In the words of Paul Krugman (1996), today America is no longer a “middle-class nation.” Wage inequality has increased in most other OECD countries as well, but the...

  7. PART III HOW INEQUALITY SHAPES DEMOCRATIC POLITICS

    • Chapter 7 Economic Shocks, Inequality, and Popular Support for Redistribution
      (pp. 203-231)
      Thomas R. Cusack, Torben Iversen and Philipp Rehm

      Despite numerous predictions to the contrary, globalization has not led to convergence in redistribution policies in different countries. This chapter argues that this does not come as a surprise, at least if we conceptualize the politics of redistribution as interaction between exogenous shocks, popular demand for compensation, and government responsiveness to such demand. Such an approach improves on the existing literature, which usually relies on cross-sectional evidence or fixed-effects regressions that ignore the role of political institutions.

      The chapter uses a data set that combines public opinion and labor force survey data to test theoretically derived hypotheses about the effects of exogenous...

    • Chapter 8 Inequality and Unemployment, Redistribution and Social Insurance, and Participation: A Theoretical Model and an Empirical System of Endogenous Equations
      (pp. 232-277)
      Robert J. Franzese JR. and Jude C. Hays

      Conflicts of interest over the generosity and structure of redistribution and social insurance (which we call, jointly, social policy) include the conflict between the relatively poor and wealthy (which theoretically produces the familiar median-voter result that democratic demand for broad redistribution increases in the income skew) and the conflict between the safely employed and the unemployed or precariously employed (which yields a different theoretical result, namely, that inequality reduces median-voter demand for social insurance). In each case, the generosity and structure of social policy may affect simultaneously the efficiency of the labor market and the political participatin of society’s less...

    • Chapter 9 Income, Inequality, and Electoral Participation
      (pp. 278-311)
      Christopher J. Anderson and Pablo Beramendi

      The supposition that material welfare influences whether and how citizens participate in democratic politics has a long and rich tradition in the social sciences. Moreover, the notion that income and income inequality matter to democratic processes and the quality of democratic outcomes is widely accepted. Yet, while scholars have vigorously investigated the impact on participation of citizens’ resources in terms of social status, education, and levels of income, the issue of how relative income at the individual level and income inequality at the macro level affect civic participation has received relatively little attention from social scientists.

      This relative lack of...

    • Chapter 10 Inequality as a Source of Political Polarization: A Comparative Analysis of Twelve OECD Countries
      (pp. 312-353)
      Jonas Pontusson and David Rueda

      This chapter focuses on the effects of income inequality on party politics in industrialized democracies. Having devoted a great deal of attention to the political determinants of income distribution in the 1990s, students of comparative political economy have recently begun to address how the distribution of income affects politics and, in particular, government policy (see, for example, Bradley et al. 2003; Kenworthy and Pontusson 2005; Mahler 2006; Moene and Wallerstein 2001, 2003). To date, virtually all the comparative literature on this topic takes the Meltzer-Richard model as its point of departure and investigates the association between inequality and various measures...

    • Chapter 11 Inequality and Institutions: What Theory, History, and (Some) Data Tell Us
      (pp. 354-386)
      Ronald Rogowski and Duncan C. MacRae

      That institutions covary with political and economic inequality seems obvious. Societies with feudal or clientelistic politics are characterized by extreme economic inequality, and democracies are associated (despite some notable exceptions) with greater economic equality than autocracies. Even within the set of democracies, institutions and inequality seem to move together. Countries with proportional methods of election, for example, display greater economic equality than countries like the United States that have majoritarian electoral institutions. But do the institutions cause the inequality, does inequality constrain institutions, or is this link caused by some more fundamental source of change, such as technology or trade?...

    • Chapter 12 Inequality and Democratic Representation: The Road Traveled and the Path Ahead
      (pp. 387-416)
      Pablo Beramendi and Christopher J. Anderson

      The chapters in this book have examined the relationship between income inequality and processes of democratic representation in the advanced democracies of the West. They have traced the dimensions, evolution, and differences in income inequality across most if not all of the rich countries, including the United States and much of Europe. But aside from documenting trends and differences in inequality across countries, they have also aimed to understand the political causes and consequences of inequality—that is, the impact that inequality has on the workings of democracy, as well as how democratic politics helps shape levels of inequality in...

  8. Index
    (pp. 417-436)