What is the connection between economic inequality and political inequality?

In recent years, many scholars have expressed concern that political systems are more responsive to better-off citizens (e.g. Bartels, 2016; Gilens, 2012). A particular fear is that, when income gaps between the rich and the poor get too wide, the voices of less well-off citizens are incapable of influencing a political system dominated by rich citizens. Such worries led the American Political Science Association to appoint a Task Force on Inequality and American Democracy in 2002. However, in spite of these widespread concerns about the relationship between economic and political inequalities, political scientists still know little about the relationship between income disparities and differences in influence in government. I am aware of only one study that assesses cross-national evidence on the relationship between economic inequality and influence in government and its findings are inconclusive (Rosset et al., 2013). Thus, we still do not know whether there is a bias in the functioning of electoral democracy that gives rich citizens an advantage in government that grows with widening economic disparities.

Another major gap in our knowledge of what influences political inequalities is the role of formal institutions. A recent study (Guntermann et al., 2020) showed that compulsory voting is associated with smaller gaps between the influence of the rich and the poor on government. A possibly more important variable to consider is the electoral system. It seems clear that left-wing governments are more common and redistribution is greater in proportional electoral systems, but, in spite of the widely-cited arguments by Lijphart (1997) and Iversen and Soskice (2006) linking electoral institutions to the influence of high- and low-income citizens on government, there are still no studies showing that the relative influence on government of rich and poor citizens depends on the electoral system. It is important to distinguish representation from specific political outcomes. More left-wing government and more redistribution do not mean that the poor necessarily have more influence. As Iversen and Soskice (2015) show, under conditions of higher inequality, citizens’ preferences may not correspond to their objective economic conditions. Thus, an assessment of whether the government better reflects the preferences of the rich than those of the poor requires taking those preferences as given rather than assuming income groups have the preferences we think would be most conducive to their well-being.

In this paper, I fill in these gaps by assessing the extent to which the preferences of high- and low-income citizens are reflected in the composition of government across a variety of democracies. I thus only consider everything that happens between the formulation of preferences by citizens and the formation of government. There are three major relevant stages. These are preference formation, elections, and the government-formation process itself. My assessment of political inequalities is thus exclusively about these stages. I recognize that low-income citizens may be disadvantaged by other processes operating after government formation such as the influence of money on policymakers (Hopkin, 2004). They may also be disadvantaged in representation by parties (e.g. Rosset et al., 2013), but this does not necessarily mean they are disadvantaged in government.

I assess representation in government using the three criteria used by Guntermann et al. (2020). They focus on two approaches to assessing representation in government used in the comparative literature: ideological congruence, meaning the proximity of citizens' ideological positions to the positions of governments (Huber and Powell, 1994) and party preference representation, the relationship between citizens’ ratings of parties and their representation in government (Blais et al., 2017). I compare the representation of the richest fifth of citizens to that of the poorest fifth. Because these groups are equal in size they should be equally represented in government if all that matters is their weight in the electorate. Thus, evidence that one group is better represented than the other indicates disproportionate influence.

I use data from modules 2 to 4 of the Comparative Study of Electoral Systems (CSES). Like previous studies on representation in government, I focus on non-presidential systems in which legislative elections determine which parties end up in government. I first determine whether each of the types of preferences I consider, left-right self-placement and party ratings, differs across income groups. I also assess whether differences in preferences between high- and low-income citizens are related to aggregate income disparities and electoral systems. I then assess how well high- and low-income respondents have been represented by the governments formed after the elections included in the CSES. Finally, I assess whether economic inequalities and proportional representation make a difference to the representation of each income group.

I find that preferences do vary by income and that the preferences of high-income citizens are better reflected in government than those of the poor more often than the opposite. Unexpectedly, economic inequalities are not associated with smaller representational gaps between high- and low-income citizens. Moreover, differences in the extent to which high- and low-income citizens’ preferences are reflected in government are not associated with the electoral system. I conclude that, while there is a general tendency for the electoral and government-formation processes to be biased in favour of the rich, increased economic disparities do not lead to greater advantage by the rich at least during the electoral and government formation processes. These findings contrast with studies showing that economic inequality leads to reduced and more unequal voter turnout (e.g. Solt, 2008, 2010) and that it leads parties to better represent the preferences of better-off citizens (Rosset et al., 2013). What my findings show is that, when it comes to representation in government, the relative influence of the rich and the poor does not depend on the degree of economic inequality or on the electoral system. They do not, however, tell us whether these variables influence inequalities at other stages such as policy formulation by parties or policymaking by governments.

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