Divide and Deal

Divide and Deal: The Politics of Distribution in Democracies

Ian Shapiro
Peter A. Swenson
Daniela Donno
Copyright Date: 2008
Published by: NYU Press
Pages: 370
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  • Book Info
    Divide and Deal
    Book Description:

    Why are democracies so unequal? Despite the widespread expectation that democracy, via expansion of the franchise, would lead to redistribution in favor of the masses, in reality majorities regularly lose out in democracies. Taking a broad view of inequality as encompassing the distribution of wealth, risk, status, and well-being, this volume explores how institutions, individuals, and coalitions contribute to the often surprising twists and turns of distributive politics.The contributors hail from a range of disciplines and employ an array of methodologies to illuminate the central questions of democratic distributive politics: What explains the variety of welfare state systems, and what are their prospects for survival and change? How do religious beliefs influence people's demand for redistribution? When does redistributive politics reflect public opinion? How can different and seemingly opposed groups successfully coalesce to push through policy changes that produce new winners and losers?The authors identify a variety of psychological and institutional factors that influence distributive outcomes. Taken together, the chapters highlight a common theme: politics matters. In seeking to understand the often puzzling contours of distribution and redistribution, we cannot ignore the processes of competition, bargaining, building, and destroying the political alliances that serve as bridges between individual preferences, institutions, and policy outcomes.

    eISBN: 978-0-8147-0883-5
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Introduction
    (pp. 1-16)
    Ian Shapiro, Peter A. Swenson and Daniela Donno

    Wealthy people used to find democracy frightening. The reason was simple: the poor, once enfranchised, should be expected to soak the rich. This fear bred elite resistance to expanding the franchise, particularly beyond the propertied classes. Nor did this fear, and the reasoning behind it, go unnoticed on the political left. The failure of the revolutions of 1830 and 1848 to radicalize Europe’s working classes sobered Marx, leading him — in later years — to endorse the “parliamentary road to socialism.” Fighting for democracy might not be such a bad idea. Perhaps the workers would do through the ballot box what they...

  4. PART I Institutions
    • Chapter 1 Welfare Regimes and Redistribution in the South
      (pp. 19-42)
      Jeremy Seekings

      The word “crisis” has been widely used in discussions of welfare states and regimes in the late twentieth century. “Almost all advanced industrial democracies cut entitlements in some programs in this period,” summarize Huber and Stephens in their bookDevelopment and Crisis of the Welfare State(2001, 1). The crisis could be seen in the developing world also; a key World Bank study was entitledAverting the Old-Age Crisis(1994), and commentators widely charged that the World Bank was imposing cuts in the form of the Chilean “neoliberal” model on countries across the South. But it is now clear that...

    • Chapter 2 Distributional Conflicts in Mature Welfare States
      (pp. 43-71)
      Isabela Mares

      The welfare state has a large, nearly ubiquitous presence in the economic activity of all advanced industrialized societies. The average level of government expenditures in OECD economies grew from 28 percent of GDP (in 1960) to 51 percent of GDP in 1997 (OECD 1999). This growth in the size of the public sector has been accompanied by a commensurate growth in the level of taxes necessary to finance existing social policy commitments. Using an average figure for OECD economies, the amount of taxes grew from 27.6 percent of GDP in 1960 to 39.4 percent of GDP in 1995 (OECD 1995)....

    • Chapter 3 The Politics of Tax Structure
      (pp. 72-98)
      Steffen Ganghof

      Governments that wish to redistribute through budgetary policy do so mostly on the spending side and not on the taxing side of the budget. The taxing side is nevertheless important, partly because less-efficient tax structure seems to be associated with lower taxation and spending levels. Hence, political struggles over spending levels may partly be fought as struggles over tax structure (e.g., Przeworski 1999: 43). A recent example of this logic is theWall Street Journaleditorial (20 Nov. 2002) that complained about the low income tax burden of a U.S. taxpayer earning twelve thousand dollars a year. These “lucky duckies”...

    • Chapter 4 AIDS, Inequality, and Access to Antiretroviral Treatment
      (pp. 99-117)
      Nicoli Nattrass

      According to the median voter theorem, democracy should facilitate a more equal distribution of resources. This chapter explores whether this is the case with regard to the provision of highly active antiretroviral therapy (HAART) to people sick with the Acquired Immunodeficiency Syndrome (AIDS). It starts off by demonstrating that HIV (Human Immunodeficiency Virus) prevalence is itself in part a product of unequal income distribution and then goes on to show how HIV is affecting the distribution of life chances by underpinning sharp declines in life expectancy. Access to HAART is thus an important aspect of distributive justice, especially in countries...

    • Chapter 5 Distributive Politics and Formal Institutions in New Democracies: The Effect of Electoral Rules on Budget Voting in the Russian State Duma, 1994–2003
      (pp. 118-146)
      Jana Kunicová

      Transition from authoritarianism to democracy in Eastern Europe and the former Soviet Union has brought about massive changes in distributive politics of the region. Most of the literature on the subject emphasizes the “dual” nature of this transition: the shift from a single-party authoritarian system to multiparty competitive democracy was accompanied by the move from centrally planned economy with state-owned means of production to market economy with private ownership. In this context, political scientists and economists alike have concentrated their attention on the massive redistribution of resources associated with privatization (Hellman 1998; Kaufmann and Siegelbaum 1999), price liberalization (Hellman, Jones,...

  5. PART II Individuals
    • Chapter 6 Religion and Social Insurance: Evidence from the United States, 1970–2002
      (pp. 149-185)
      Kenneth Scheve and David Stasavage

      One of the major puzzles for political economy and a central question in this volume is why some governments adopt policies that intervene heavily to redistribute income from rich to poor and to provide social insurance against adverse events, while other governments do much less in either regard.¹ Existing literature on the political economy of redistribution and the welfare state has identified a number of plausible factors that can influence policy outcomes in this area. These include, among others, prior levels of inequality, labor market structure, issue bundling and coalition politics, constitutional structures, and partisanship.² Models produced by economists have...

    • Chapter 7 Moral Values and Distributive Politics: An Equilibrium Analysis of the 2004 U.S. Election
      (pp. 186-220)
      Woojin Lee and John Roemer

      The Republican Party, whose economic policies are perhaps in the economic interest of the top 15 percent of the wealth distribution, is supported by approximately one-half of the U.S. electorate. President George W. Bush, during his first term, made quite clear what his economic policies are—from tax cuts that benefit primarily the very rich, engendering large deficits, to abolition of the inheritance tax and privatizing Social Security.

      In contrast, the policies of the Democratic Party are not left-wing; they are moderate. It would seem that, if voters were rational and concerned largely about the economic issue, the Democratic Party...

    • Chapter 8 Giving the People What They Want? Age, Class, and Distribution in the United States
      (pp. 221-242)
      Christopher Howard

      Democratic societies are rife with inequalities. Some of these inequalities are so deep, persistent, or consequential that they provoke disbelief and outrage. How could any nation with some semblance of political equality allow key resources to be distributed so unevenly among its members? Surely, most people would not accept such inequalities, so the answer must lie elsewhere, such as the design of institutions or the disproportionate power of interest groups.

      Of course, inequalities that provoke outrage in one person may seem unremarkable, perhaps even legitimate, to another person. Powerful minorities may not have to “rig the game” in order to...

  6. PART III Coalitions
    • Chapter 9 Good Distribution, Bad Delivery, and Ugly Politics: The Traumatic Beginnings of Germany’s Health Care System
      (pp. 245-279)
      Peter A. Swenson

      “Will America copy Germany’s mistakes?” asked Gustav Hartz, a noted German critic of his country’s national health insurance system in a 1935 issue of theNew York State Medical Journal(Hartz 1935). The answer was made public soon. By the time of publication, President Franklin Roosevelt had already decided against including health insurance in the Social Security Act. Medical leaders whom he summoned to advise him on the matter had vehemently advised against it; bad news from Germany was one reason. FDR’s top medical adviser, the internationally renowned Yale neurosurgeon Harvey Cushing, had written to eminent German doctors for their...

    • Chapter 10 Democracy and Distributive Politics in India
      (pp. 280-297)
      Pranab Bardhan

      To most theorists of democracy in the West, India is an embarrassing anomaly and hence largely avoided. By most theoretical stipulations India should not have survived as a democracy: it is too poor, its citizens are largely rural and uneducated, its civic institutions are rather weak. It is a paradox even for those who believe in a positive relationship between economic equality or social homogeneity and democracy: its wealth inequality (say, in land distribution, and even more in education or human capital) is high, and its society is one of the most heterogeneous (in terms of ethnicity, language, caste, and...

    • Chapter 11 The Political Uses of Public Opinion: Lessons from the Estate Tax Repeal
      (pp. 298-340)
      Mayling Birney, Ian Shapiro and Michael J. Graetz

      What impact does public opinion have on legislative outcomes in a democracy? In this chapter, we ask this question while examining the surprising case of the repeal of the federal estate tax in 2001. This repeal benefits only a tiny minority of very wealthy Americans: those bequeathing, or inheriting from, estates larger than $1 million. Logically, one might have anticipated, as congressional Democrats did for a long time, that such a regressive measure would provoke a popular backlash. If enacted at all, it would be done in the dead of night or after being buried quietly within a larger bill,...

  7. About the Contributors
    (pp. 341-342)
  8. Index
    (pp. 343-359)