Guest Post: Inequality Undermines Democracy

In recent years, several academic researchers have argued that rising inequality erodes democracy. But the lack of international data has made it difficult to show whether inequality in fact exacerbates the apparent lack of political responsiveness to popular sentiment. Even scholars concerned about economic inequality, such as sociologist Lane Kenworthy [4], often hesitate to argue that economic inequality might bleed into the political sphere. New cross-national research, however, suggests that higher inequality does indeed limit political representation.

In a 2014 study [5] on political representation, political scientists Jan Rosset, Nathalie Giger and Julian Bernauer concluded, “In economically more unequal societies, the party system represents the preferences of relatively poor citizens worse than in more equal societies.” Similarly, political scientists Michael Donnelly and Zoe Lefkofridi found [6] in a working paper that in Europe, “Changes in overall attitudes toward redistribution have very little effect on redistributive policies. Changes in socio-cultural policies are driven largely by change in the attitudes of the affluent, and only weakly (if at all) by the middle class or poor.” They find that when the people get what they want, it’s typically because their views correspond with the affluent, rather than policymakers directly responding to their concerns.

In another study of Organisation for Economic Co-operation and Development countries, researcher Pablo Torija Jimenez looked at data in 24 countries over 30 years. He examined how different governmental structures influence happiness across income groups and found [7] that today “politicians in OECD countries maximize the happiness of the economic elite.” However, it was not always that way: In the past, left parties represented the poor, the center and the middle class. Now all the parties benefit the richest 1 percent of earners, Jimenez reports.

In a recent working paper [8], political scientist Larry Bartels finds the effect of politician’s bias toward the rich has reduced real social spending per capita by 28 percent on average. Studying 23 OECD countries, Bartels finds that the rich are more likely to oppose spending increases, support budget cuts and reject promoting the welfare state — the idea that the government should ensure a decent standard of living.

The same tendencies occur at the state level. Patrick Flavin, a political scientist at Baylor University, examined [9] political responsiveness in the U.S. at the state level. He found that inequality in a state strongly correlates with political representation: More unequal states tend to be less representative.

“The effect of income inequality is stronger than just about any other state contextual factor that I’ve looked at,” Flavin told me in a recent interview. “For example, it has a stronger predictive effect on the equality of political representation than the partisan composition of the state legislature/governor’s mansion, the median income of a state, or a state’s population.” Similarly, Elizabeth Rigby and Gerald Wright found [10] that in more unequal states, Democrats tend to be less responsive to the poor.

Some political scientists have found more mixed results internationally. Political scientists James Adams and Lawrence Ezrow found [11] that European democracies are more responsive to “opinion leaders,” or highly politically engaged citizens, than to class differences. “No evidence that European parties respond disproportionately to affluent or highly educated citizens, independently of their responsiveness to opinion leaders,” Adams and Ezrow wrote in 2009. That is, to the extent that the government is more responsive to the affluent, it is because of influential opinion makers among them. However, in a recent [12] Monkey Cage post, Ezrow notes, “levels of economic inequality condition levels of political inequality.”

What’s the solution to rising inequality of responsiveness? More democracy, for one. In a study published last November, political scientists Yvette Peters and Sander J. Ensink examined [13] political representation and responsiveness in 25 European countries. Using the European Social Survey from 2002 to 2010, they analyzed support for income redistribution policies across various categories.

“Governments tend to follow the preferences of the rich more than those of the poor,” Peters and Ensink write. “Higher levels of participation in elections seem to lead to reduced differential responsiveness, even though the effect of the poor and the rich on spending is not fully equalized.”

As I’ve argued [14] previously, there is good reason to believe that increasing voter turnout among the poor and middle class will shift policy in their favor. For example, in a 2013 study, Loyola University’s Vincent Mahler found [15] that voter turnout and class gaps both affect income redistribution.

Voter turnout, of course, will not entirely solve the problem of differential representation, but it can begin to alleviate it. When turnout is in the low 40s, as it is for many U.S. elections, politicians have no reason to fear losing their seat by only representing the donor class. By contrast, with mass participation, ignoring the desires of the public could cost a representative his seat. Using American National Election Studies data, Syracuse University political scientist Spencer Piston ran a unique analysis for Al Jazeera America. His data show that in terms of median income, the median non-voter is far poorer than the median voter — $32,500 per year compared with $57,500.

“Preferences of those with money are more likely to influence policy than the preferences of those without money, in no small part because the wealthy engage more in the political process,” Piston told me. “They vote more often, they donate more money, and they are in closer contact with public officials.” These data also understate the wealth of the donor class, since they include all donors. But the megadonors are increasing influential: the richest .01 percent of donors (25,000 people) were responsible for 42 percent of donations in 2012.

So while voting will partially alleviate political inequality, we also need campaign-finance reforms such as public financing and more robust disclosure rules. Lobbying reforms and limits on campaign contributions have a proven track record [16] at the state level.

On the whole, there is a strong evidence to suspect that representative democracy is not compatible with deep economic inequality. The American Founding Fathers, classic progressives such as Presidents Theodore and Franklin Roosevelt and commentators such as economist Thomas Piketty are right to worry about how inequality undermines democracy. As FDR warned, “Government by organized money is just as dangerous as government by organized mob.”