How Political Voice Fares in an Age of Rising Inequality: Frederick Solt’s Research on Economic Inequality and Democracy

The basics of modern life — job, education, and income — can shape our interest in politics, our desire to discuss politics with others, and our decision to vote. In the parlance of social science, occupation and socioeconomic status may impact “political engagement.”

We politically engage, or not, during an age of rising economic inequality.

Economic inequality matters. It chastens social mobility: the rich stay rich and the poor have extreme difficulty, especially in hard times, to climb up the social ladder.

Economic inequality is something you can see. You can see somebody driving down the street in a car that you can’t afford. You can walk the city and gape at the rich neighborhoods. The economic “gap” can stimulate or irritate; it is something you feel.

Frederick Solt, now an Associate Professor of Political Science at the University of Iowa, thought that the economic inequality all around us influences our socioeconomic situation which, in turn, influences our political engagement.

This is a story of two of Fred Solt’s research articles on how political voice fares in an age of rising economic inequality.

The Theories of Engagement

If economic inequality touches so many areas of modern life, then, he reasoned, it must also play a role in whether people care about politics and show up to the voting booth. But how can inequality – that there are rich and poor and that there is a large gap between them – influence political engagement?

Solt consulted the literature on politics and inequality and sorted through the explanations, old and new. He read Moore, Dahl, Brady, Schlozman, and Verba. He read de Tocqueville, Schattschneider, Rueschemeyer, Stephens, and Stephens, Lijphart, and Lukes.

He built on their work and devised three main theories.

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Interview with Renira Angeles on Politics, Inequality, and Executive Pay

Renira C. Angeles, who recently received her PhD in Political Science from Central European University (CEU), Hungary, has presented a paper co-authored with Achim Kemmerling, University of Erfurt, Germany, “How Redistributive Institutions Affect Pay Inequality and Heterogeneity among Top Managers,” at the Politics and Inequality conference held December 2018 in Warsaw, Poland.

Dr. Angeles applies quantitative research methods to understand the political causes and consequences of income inequality, especially at the high-end of the income ladder, as well as the consequences of parties’ economic policies. Renira C. Angeles recently published the article, “The Politics of Top Executive Compensation in Advanced Democracies,” in Sociology Compass. In 2018, Dr. Angeles led a project on technology, inequality and education in the Norwegian Board of Technology, providing policy advice to the Norwegian Parliament.

We asked Dr. Angeles for an extended abstract of their Politics and Inequality conference paper and, via email, some questions about their research.

Extended Abstract

 The incredible rise of executive pay has received a lot of scholarly interest. Since the 1970s, generous bonus rewards for top executives have appeared more frequently. This trend has been more widespread in some democracies more than others. This paper asks, Why do some advanced democracies experience growth average CEO pay levels more so than others? We argue that a crucial problem in moderating these increases is the heterogeneity among top managers. In particular, inequality among top managers’ pay makes redistributive institutions, more so than other institutions, better suited to deal with rising pay. To empirically test our argument, we use a novel data set on executive pay across 17 OECD countries. We compare the effect of different institutional factors: corporate and personal income taxation, the unions’ bargaining power, and regulative attempts. We find that redistributive institutions of personal income tax and unions’ bargaining power is effective in moderating high labour wages, especially for very large firms as measured by their stock market value.

Interview

The research you presented at the Politics and Inequality conference was a co-authored paper (with Achim Kemmerling) on cross-national variation in the pay of top managers. How did you get interested in this topic? And how is this topic connected to other research that you are doing?

I’m interested in the multidimensionality of inequality and the different implications it has for democracies. I got interested in assessing CEO pay and inequality during my MA studies where I examined the politics of CEO pay in the largest Norwegian state-owned companies.  Looking into CEO pay does not tell us the whole story on the politics of inequality, but it can tell us a good deal about the economic fortunes of the working poor. Although we have firm research in redistributive politics, and theories of institutions and income inequality, we need specific theories that can tell us why average CEO pay differs across industrialized economies.

Further, I was interested in looking across Europe where redistributive institutions and policies in general exist to a greater extent than, say, the US.  This paper assesses the political causes of CEO pay, but that is just half of the story. My interest into this topic also evolved from the thought of the possible policy feedback that generous bonus schemes can generate.

Renira Angeles Warsaw Politics and Inequality Conference

In this paper, you use an original dataset. Please briefly describe these data and why they are well-suited for your research.

The data is collected from annual reports of firms. There are executive characteristics as well as industry and firm characteristics. It is well suited to my mission to assess redistributive institutions and policies because it is a record of the economic fortunes of top managers who – because money is a political resource – can also be significant political actors.

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Interview with Gwangeun Choi on Economic and Political Inequality in Cross-national Perspective

Gwangeun Choi presented the paper, “The Link between Economic and Political Inequality in Cross-National Perspective” at the Politics and Inequality conference held in Warsaw, Poland in December 2018.

Dr. Choi recently received a PhD in Government at the University of Essex in the UK. His research interests are in the areas of democracy, quality of democracy, political inequality, economic inequality, perceived inequality, redistributive preferences, redistribution, and universal basic income. His latest article, “Revisiting the Redistribution Hypothesis with Perceived Inequality and Redistributive Preferences” appeared at the European Journal of Political Economy (2019).

We asked Gwangeun Choi for an extended abstract of his Politics and Inequality conference paper and, via email, some questions about his research. We are thankful for his positive and detailed response.

Extended Abstract by Gwangeun Choi

It is widely believed that there exists a debilitating feedback cycle linking economic and political inequality. However, there has been a lack of empirical evidence about this association, particularly, in cross-national comparative research. It is largely because cross-national measures of political inequality are underdeveloped. To fill this gap, this study introduces the Political Inequality Index (PII) and the Political Power Inequality Index (PPII). The PII is composed of the two dimensions: participation and representation, which are based on the reconceptualization of political inequality from the perspective of a middle-range conception. The PPII comes from the indicators that measure the distribution of political power across socioeconomic position, social group, and gender, which the Varieties of Democracy provides. This inquiry then investigates the two-way causal relationship between economic and political inequality. In the first causal direction, net income inequality is used as a proxy for economic inequality, while in the reverse causal linkage political inequality is supposed to influence market income inequality and redistribution separately, as income inequality is considered as an outcome of the two different distributive stages. In doing so, both causal directions between economic and political inequality are integrated into a unified framework. With respect to estimation techniques, a system GMM estimator for a dynamic panel data model, which is an increasingly popular estimation method, is mainly used to address the issue of endogeneity. The findings show that net income inequality does not significantly affect political inequality and that political inequality appears to have little impact on market income inequality, while political inequality seems to contribute to economic inequality by influencing redistribution in a negative direction.

Interview

The research you presented at the Politics and Inequality conference was on the relationship between political inequality and economic inequality in cross-national perspective. How did you get interested in this topic? And how is this topic connected to other research that you are doing?

I first became interested in a concept ‘political equality’ while I was doing research on the quality of democracy. In my framework designed to conceptualize and measure the level of democracy, political equality was one of the three core principles of democracy. Thus, it was easy for me to construct a new measure of political inequality, building on this framework. The next step was to investigate the reciprocal relationship between economic inequality and political inequality, as I realized that there is a lack of empirical evidence on this linkage although no one seems to doubt the widespread belief of the vicious cycle between economic and political inequality.

What is most challenging about measuring political inequality, and why?

I think that the most challenging part is to provide convincing theoretical arguments on the conceptualization of political inequality. Measuring the quality of democracy is also faced with the same issue. My study on democracy and political inequality and several other studies attempting to measure them with relatively thick concepts reached a consensus in excluding both minimalist and maximalist approaches. However, this does not guarantee that the majority of scholars agree with a specific middle-range concept of democracy or political inequality. This is therefore a more pressing issue than a range of measurement problems.

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Interview with Constantin Manuel Bosancianu on Party–Voter Ideological Congruence and Socioeconomic Biases in Representation

Constantin Manuel Bosancianu, of WZB Berlin Social Science Center, Germany, presented the paper, “Party–Voter Ideological Congruence and Socio-Economic Biases in Representation: OECD over the Past 5 Decades” at the Politics and Inequality conference held in Warsaw, Poland in December 2018.

Constantin Manuel Bosancianu is a postdoctoral researcher in the “Institutions and Political Inequality” unit at the Berlin Social Science Center (WZB). He focuses on the intersection of political economy and electoral behavior: how to measure political inequalities between citizens of both developed and developing countries, and what the linkages between political and economic inequalities are. Dr. Bosancianu received his PhD in 2007 from the Central European University, Budapest, with a dissertation on how the dynamics of party ideological shifts, economic inequality, and individual political participation unfold over time. He is interested in statistics, data visualization, and the history of Leftist parties. In the past, Dr. Bosancianu taught or assisted with teaching methods courses at the European Consortium for Political Research (ECPR) Winter and Summer Methods Schools, University of Heidelberg or University of Gießen, with a focus on regression analysis, R, Bayesian analysis, and multilevel modelling.

We asked Constantin Manuel Bosancianu for an extended abstract of his Politics and Inequality conference paper and, via email, some questions about his research. We are thankful for his positive and detailed response.

Extended Abstract

Disparities in political representation between socio-economic groups, if perpetuated over time, can lead to growing disenchantment with the political process, dropout from political life, and even the appearance of new political movements that challenge representative institutions (Taggart, 2002). Starting with the early investigations of Gilens (2005, 2009, 2012) for the US context, a series of analyses have found disparities in political representation across a larger number of consolidated democracies (Elsässer, Hense, & Schäfer, 2018; Giger, Rosset, & Bernauer, 2012; Peters & Ensink, 2015; Rosset, Giger, & Bernauer, 2013; Rosset, 2013). Despite the consistent results, we continue to have very limited knowledge about the causes and mechanisms for these disparities.

This analysis probes into this issue. By relying on an original data set of merged voter studies in 30 OECD countries, going as far back in time as the 1960s and 70s, I compute a measure of ideological congruence between voters and political parties. Called the Earth Mover’s Distance (Lupu, Selios, & Warner, 2017), it is based on citizens’ self-placement on a standard Left-Right axis, as well as their placement of parties on the same scale (Powell Jr., 2009). By relying on voters’ perceptions of parties rather than legislator self-placements (Lupu & Warner, 2018), my data overcomes the potential flaw of different understandings of “Left” and “Right” between people and political elites. This measure of congruence is then used to ascertain: (1) if representation gaps between voters at the opposite end of the socio-economic spectrum are found in my sample, and (2) whether the gaps in representation are associated with a demand-side characteristic (disparities in political participation between the same socio-economic groups) or a supply-side factor (party ideological changes over time).

Preliminary findings do little to dispel the mystery surrounding the causes of unequal representation for poorer citizens, though they conclusively establish that such a gap exists. They furthermore establish that overall quality of representation is associated with disparities in participation: contexts where turnout between income groups is more unequal have worse overall representation of income groups. However, even when relying on a measure of participation disparities generated from individual-level data, no clear association exists between disparities in political voice and gaps in representation between income groups. Neither do party-system dynamics appear to explain the disparity in ideological convergence between income groups. Though inconclusive, the findings confirm those of Lupu and Warner (2018) and will hopefully spur the focus on additional mechanisms to explain the relative disadvantage in representation that poorer citizens are faced with.

Interview

The research you presented at the Politics and Inequality conference was on party–voter congruence. How did you get interested in this topic? And is this topic connected to other research that you are doing?

The interest in political representation, for which party-voter ideological congruence is one proxy, came about through my focus on understanding how to measure the facets of political inequality between individuals and groups. For the past few years I have been interested in disparities in political voice between individuals and groups—aspects such as turnout, non-electoral participation, or political efficacy. These are shaped by individual resource endowments, which naturally generate inequalities in voice. This is only part of the story, though. Another part is how disparities in voice and political influence are shaped by systemic features pertaining to, say, the electoral system or party system configurations. Some of Orit Kedar’s work is an excellent example of this, as is that of Karen L. Jusko. My own attempts refer to another feature of the system: the distribution of parties along a Left–Right ideological dimension.

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Interview with Jan Falkowski on Political Power and Land Inequality in Poland

Jan Falkowski, of the University of Warsaw, Poland, recently presented a paper, “Do Political and Economic Inequalities Go Together? Mayors’ Turnover, Elite Families and the Distribution of Agricultural Land” at the Politics and Inequality conference held in Warsaw, Poland.

Jan Falkowski is an Assistant Professor with the University of Warsaw, Faculty of Economic Sciences, Chair of Political Economy. His primary research interests are in the impact of institutions and politics on economic processes, and the reciprocal influence of economic conditions on institutional environment and political life. His paper, “Promoting Change or Preserving the Status Quo? The Consequences of Dominating Local Politics By Agricultural Interests” was published in Land Use Policy (2017), and his paper with Grażyna Bukowska  and Piotr Wójcik, “The Political Power of Large‐Scale Farmers and Land Inequality: Some Evidence from Poland,” was just published by Sociologia Ruralis (2018).

We asked Jan Falkowski some questions about his research.

The research you presented at the Politics and Inequality conference was on the economic impact of the distribution of political power. How did you get interested in this topic? And how is this topic connected to other research that you are doing?

The interlinkage between  political and economic power has always been of interest to me. Looking at the connection between political and economic inequalities seemed to me as a natural consequence of studying the former relationship since the distribution of power and the distribution of resources (be it political or economic) are closely related.

In this paper, you use an original dataset. Please briefly describe these data and why they are well-suited for your research.

Measuring economic inequality poses some difficulties as people are typically not so willing to share with others detailed information on how much wealth they have. We needed therefore to overcome this problem or, at least, to try to do so. We discovered that it should be possible to achieve this goal by looking at a specific, but coherent, part of the population, namely farmers. What we do in the paper is we take advantage of the fact that in Poland the information on those who received agricultural subsidies is public. So it is possible to gather, at the individual level, the information on how much money a given person received in the form of the so-called direct payments. In the system that Poland uses to subsidize farmers, direct payments are granted to farmers based on a national flat rate per eligible hectare, and – contrary to what we observe in many other EU Member States – they do not depend on the historical reference period. Thus, the distribution of direct payments at the municipality level can serve as a good approximation of land use distribution. This, in turn, can be used to measure the distribution of wealth.  Obviously, the shortcoming is that it can serve as a good approximation of wealth distribution only in rural areas, in which the dependence on agriculture as a source of living is high. In the paper we collate these data with the data on mayors’ turnover which we use as an approximation of political inequality.

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Neoliberalism and Democracy

by Alex Afouxenidis, National Centre for Social Research, Athens, Greece

Neoliberalism is based on the idea of ignoring fundamental human needs. The success of neoliberal political strategies rests on a mixture of rhetoric and control of democracy’s major local and global institutions. It is also based on the erosion of the key actors and institutions that are the main underpinnings of contemporary democracies, such as pressure groups, civic organizations, and educational institutes. In neoliberalism’s economic sphere, economic growth does not need to translate into growth of equality. Considering rising social, economic, and political inequalities, we are looking at abuse being taken for granted.

Understanding the Political Shift

The pervasive counter-democratic ideological force of neoliberalism has had a deep impact on people’s lives, identities and beliefs despite its obvious failure to sustain any meaningful sense of ‘economic growth’. This is evident in many regions across the world where economies are being re-structured and reformed generating greater forms of inequality and limiting political freedom. Political crises have become everyday occurrence for many nations. Governments are in a continuous state of instability and many turn to (semi?) authoritarian rule in order to retain power.

Market idealization is not working: it has generated profound constraints on people’s liberty and self-determination.

As one reflects upon the countless analyses and informed criticisms on the impact of neoliberal ideology and strategy, it becomes increasingly clear that the main constitutive element of this sort of ‘philosophy’ is related to the idea of ignoring fundamental human needs. This conceptualization has generated a rupture with respect to western classical liberal discourses such as those, for example, put forward by J. Locke, J.S. Mill or J. Rawls. For, even though they strongly suggested personal autonomy, they equally forcefully reflected upon the idea that if the needs of individuals are not adequately met then liberty will be limited.

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Elites care about inequality, but probably not in the way that you think

by Matias Lopez, Universidad Católica, Chile

A survey of over 800 elites in six Latin American countries reveals that they acknowledge economic inequality as a problem, but see little incentive to reduce inequality. The elite from stronger and more stable democracies tend to be more aware of inequality as a political problem. Yet they do not view equitable income re-distribution as the answer.

That a tiny elite accumulates excessive wealth and power prompts concern about the future of democracy. We know from several studies that this inequality may generate conflict and support for non-democratic leadership — a perilous situation recognized by citizens of the United States and Europe. But what do elites themselves think about the risks of inequality? Do they feel comfortable living with these risks, or do they feel worried about them? And if they feel worried, what are they willing to do about it?

To answer these questions, Latin America provides a very useful set of cases. Many large and durable democracies in the region, such as Argentina, Brazil, and Mexico, have high levels of economic inequality even though this inequality creates urban violence and social unrest. Extreme inequality in a democracy is a problem for average citizens because it puts in doubt Lincoln’s principle of “government of the people, by the people, for the people.” Meanwhile, elites also have good reasons to fear inequality as they are clearly impacted by the political turmoil and the social violence that can follow.

I looked at the University of São Paulo survey conducted in six Latin American countries of over 800 members of the elite in the realms of politics, business, and civil society. I found out that most of the elite share the usual concerns about inequality and democratic stability.

But the relationship between concern and action has not to do with inequality itself, but with the strength and stability of democracy.

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