1932

Abstract

Recent work has documented an upward trend in inequality since the 1970s that harks back to the Gilded Age: the inegalitarian pre–World War I world. Most prominently, Thomas Piketty argues in that this is partially due to the fact that capitalism is hardwired to exacerbate the gap between the rich and poor. By critically evaluating recent literature on this topic, this article offers three big contributions. First, we advance an alternative explanation for the long-term U-shaped nature of inequality that Piketty examines. Political regime types and the social groups they empower, rather than war and globalization, can account for the sharp fall and then sharp rise in inequality over the long 20th century. Second, we demonstrate that this U-shaped pattern only really holds for a handful of industrialized economies and a subset of developing countries. Finally, we provide a unified framework centered on two unorthodox assumptions that can explain inequality patterns beyond the U-shaped one. Capitalists and landholders actually prefer democracy if they can first strike a deal that protects them after transition. This is because dictators are not the loyal servants of the economic elite they are portrayed to be—in fact, they are often responsible for soaking, if not destroying, the rich under autocracy.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-polisci-042114-015008
2016-05-11
2024-12-12
Loading full text...

Full text loading...

/deliver/fulltext/polisci/19/1/annurev-polisci-042114-015008.html?itemId=/content/journals/10.1146/annurev-polisci-042114-015008&mimeType=html&fmt=ahah

Literature Cited

  1. Acemoglu D, Robinson J. 2006. Economic Origins of Dictatorship and Democracy New York: Cambridge Univ. Press [Google Scholar]
  2. Aidt T, Jayasri, Dutta J, Loukoianova E. 2006. Democracy comes to Europe: franchise extension and fiscal outcomes 1830–1938. Eur. Econ. Rev. 50:249–83 [Google Scholar]
  3. Albertus M. 2015a. Autocracy and Redistribution: The Politics of Land Reform New York: Cambridge Univ. Press [Google Scholar]
  4. Albertus M. 2015b. Explaining patterns of redistribution under autocracy: the case of Peru's revolution from above. Latin Am. Res. Rev. 50:2107–34 [Google Scholar]
  5. Albertus M. 2015c. The role of subnational politicians in distributive politics: political bias in Venezuela's land reform under Chávez. Comp. Polit. Stud. In press. doi: 10.1177/0010414015600457 [Google Scholar]
  6. Albertus M, Menaldo V. 2012a. Coercive capacity and the prospects for democratization. Comp. Polit. 44:151–69 [Google Scholar]
  7. Albertus M, Menaldo V. 2012b. If you're against them you're with us: the effect of expropriation on autocratic survival. Comp. Polit. Stud. 45:973–1003 [Google Scholar]
  8. Albertus M, Menaldo V. 2014a. Gaming democracy: elite dominance during transition and the prospects for redistribution. Br. J. Polit. Sci. 44:575–603 [Google Scholar]
  9. Albertus M, Menaldo V. 2014b. Dealing with dictators: negotiated democratization and the fate of outgoing autocrats. Int. Stud. Q. 58:550–65 [Google Scholar]
  10. Alesina A, Glaeser E. 2004. Fighting Poverty in the US and Europe: A World of Difference Oxford, UK: Oxford Univ. Press [Google Scholar]
  11. Ansell B, Samuels D. 2010. Inequality and democratization: a contractarian approach. Comp. Polit. Stud. 43:1543–74 [Google Scholar]
  12. Atkinson A. 2015. Inequality: What Can Be Done? Cambridge, MA: Harvard Univ. Press [Google Scholar]
  13. Bartels L. 2005. Homer gets a tax cut: inequality and public policy in the American mind. Perspect. Polit. 3:15–31 [Google Scholar]
  14. Bartels L. 2008. Unequal Democracy: The Political Economy of the New Gilded Age Princeton, NJ: Princeton Univ. Press [Google Scholar]
  15. Bates R. 1991. The economics of transitions to democracy. PS: Polit. Sci. Polit. 24:24–27 [Google Scholar]
  16. Benabou R, Ok E. 2001. Social mobility and the demand for redistribution: the POUM hypothesis. Q. J. Econ. 116:447–87 [Google Scholar]
  17. Beramendi P. 2012. The Political Geography of Inequality: Regions and Redistribution New York: Cambridge Univ. Press [Google Scholar]
  18. Bird R, Zolt E. 2005. Redistribution via taxation: the limited role of the personal income tax in developing countries. UCLA Law Rev. 52:1627–95 [Google Scholar]
  19. Boix C. 2003. Democracy and Redistribution New York: Cambridge Univ. Press [Google Scholar]
  20. Dailami M. 2000. Financial Openness, Democracy, and Redistributive Policy Washington, DC: World Bank [Google Scholar]
  21. de Toqueville A. 1841. Democracy in America New York: Langley [Google Scholar]
  22. Diaz-Cayeros A, Estévez F, Magaloni B. 2016. The Political Logic of Poverty Relief: Electoral Strategies and Social Policy in Mexico New York: Cambridge Univ. Press In press [Google Scholar]
  23. Downing B. 1992. The Military Revolution and Political Change: Origins of Democracy and Autocracy in Early Modern Europe Princeton, NJ: Princeton Univ. Press [Google Scholar]
  24. Esping-Andersen G. 1990. The Three Worlds of Welfare Capitalism Cambridge, UK: Polity [Google Scholar]
  25. Freeman J, Quinn D. 2012. The economic origins of democracy reconsidered. Am. Polit. Sci. Rev. 106:58–80 [Google Scholar]
  26. Gilens M, Page B. 2014. Testing theories of American politics: elites, interest groups, and average citizens. Perspect. Polit. 12:564–81 [Google Scholar]
  27. Haggard S, Kaufman R. 2012. Inequality and regime change: democratic transitions and the stability of democratic rule. Am. Polit. Sci. Rev. 106:495–516 [Google Scholar]
  28. Haggard S, Maxfield S. 1996. The political economy of financial internationalization in the developing world. Int. Organ. 50:35–68 [Google Scholar]
  29. Houle C. 2009. Inequality and democracy: why inequality harms consolidation but does not affect democratization. World Polit. 61:589–622 [Google Scholar]
  30. Husted T, Kenny L. 1997. The effect of the expansion of the voting franchise on the size of government. J. Polit. Econ. 105:54–82 [Google Scholar]
  31. Inman R, Rubenfeld D. 2005. Federalism and the democratic transition: lessons from South Africa. Am. Econ. Rev. 95:39–43 [Google Scholar]
  32. Iversen T, Soskice D. 2006. Electoral institutions, parties, and the politics of class: why some democracies redistribute more than others. Am. Polit. Sci. Rev. 100:165–81 [Google Scholar]
  33. Iversen T, Soskice D. 2009. Distribution and redistribution: the shadow of the nineteenth century. World Polit. 61:3438–86 [Google Scholar]
  34. Justman M, Gradstein M. 1999. The Industrial Revolution, political transition, and the subsequent decline in inequality in 19th century Britain. Explor. Econ. Hist. 36:109–27 [Google Scholar]
  35. Kaufman R, Segura-Ubiergo A. 2001. Globalization, domestic politics, and social spending in Latin America. World Polit. 53:553–87 [Google Scholar]
  36. Kiser E, Linton A. 2001. Determinants of the growth of the state: war and taxation in early modern France and England. Soc. Forces 80:411–48 [Google Scholar]
  37. Korpi W. 1983. The Democratic Class Struggle London: Routledge [Google Scholar]
  38. Kuznets S. 1955. Economic growth and income inequality. Am. Econ. Rev. 49:1–28 [Google Scholar]
  39. Levi M. 1997. Consent, Dissent, and Patriotism New York: Cambridge Univ. Press [Google Scholar]
  40. Lindert P. 1994. The rise of social spending. Explor. Econ. Hist. 31:1–37 [Google Scholar]
  41. Lindert P. 2004. Growing Public: Social Spending and Economic Growth Since the Eighteenth Century Cambridge, UK: Cambridge Univ. Press [Google Scholar]
  42. Lizzeri A, Persico N. 2004. Why did the elites extend the suffrage? Democracy and the scope of government, with an application to Britain's Age of Reform. Q. J. Econ. 119:707–65 [Google Scholar]
  43. Lott J, Kenny L. 1999. Did women's suffrage change the size and scope of government?. J. Polit. Econ. 107:1163–98 [Google Scholar]
  44. Mares I, Queralt D. 2015. The non-democratic origins of income taxation. Comp. Polit. Stud. In press [Google Scholar]
  45. Meltzer A, Richard S. 1981. A rational theory of the size of government. J. Polit. Econ. 89:914–27 [Google Scholar]
  46. Menaldo V. 2016. The Institutions Curse: Natural Resources, Politics, and Development New York: Cambridge Univ. Press [Google Scholar]
  47. Menaldo V, Yoo D. 2015. Democracy, elite-bias and financial development in Latin America. World Polit. 67:1–34 [Google Scholar]
  48. Moore B. 1966. Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World Boston: Beacon [Google Scholar]
  49. Mulligan C, Gil R, Sala-i-Martin X. 2004. Do democracies have different public policies than nondemocracies?. J. Econ. Perspect. 18:51–74 [Google Scholar]
  50. Perotti R. 1996. Growth, income distribution, and democracy: what the data say. J. Econ. Growth 1:149–87 [Google Scholar]
  51. Piketty T. 2014. Capital in the Twenty-First Century Cambridge, MA: Harvard Univ. Press [Google Scholar]
  52. Przeworski A. 2009. Conquered or granted? A history of suffrage extensions. Br. J. Polit. Sci. 39:291–321 [Google Scholar]
  53. Remmer K. 1990. Democracy and economic crisis: the Latin American experience. World Polit. 42:315–35 [Google Scholar]
  54. Roemer J. 1998. Why the poor do not expropriate the rich: an old argument in new garb. J. Public Econ. 70:399–424 [Google Scholar]
  55. Ross M. 2006. Is democracy good for the poor?. Am. J. Polit. Sci. 50:860–74 [Google Scholar]
  56. Scheve K, Stasavage D. 2010. The conscription of wealth: mass warfare and the demand for progressive taxation. Int. Organ. 64:529–61 [Google Scholar]
  57. Scheve K, Stasavage D. 2012. Democracy, war, and wealth: evidence from two centuries of inheritance taxation. Am. Polit. Sci. Rev. 106:81–102 [Google Scholar]
  58. Shapiro I. 2002. Why the poor don't soak the rich. Daedalus 131:118–28 [Google Scholar]
  59. Shesko E. 2015. Mobilizing manpower for war: toward a new history of Bolivia's Chaco conflict, 1932–35. Hisp. Am. Hist. Rev. 95:299–334 [Google Scholar]
  60. Slater D, Smith B, Nair G. 2014. Economic origins of democratic breakdown? The redistributive model and the postcolonial state. Perspect. Polit. 12:353–74 [Google Scholar]
  61. Solt F. 2009. Standardizing the world income inequality database. Soc. Sci. Q. 90:231–42 [Google Scholar]
  62. Steinmo S. 1993. Taxation and Democracy: Swedish, British and American Approaches to Financing the Modern State New Haven, CT: Yale Univ. Press [Google Scholar]
  63. Stephens J. 1979. The Transition from Capitalism to Socialism London: Macmillan [Google Scholar]
  64. Stokes S. 2001. Mandates and Democracy: Neoliberalism by Surprise in Latin America. Cambridge, UK: Cambridge Univ. Press [Google Scholar]
  65. Tilly C. 1992. Coercion, Capital, and European States, AD 990–1992 Oxford, UK: Blackwell [Google Scholar]
  66. Timmons J. 2010. Does democracy reduce economic inequality?. Br. J. Polit. Sci. 40:741–57 [Google Scholar]
  67. Walsh K. 2012. Putting inequality in its place: rural consciousness and the power of perspective. Am. Polit. Sci. Rev. 106:517–32 [Google Scholar]
  68. Ziblatt D. 2016. Conservative Political Parties and the Birth of Modern Democracy in Europe, 1848–1950. New York: Cambridge Univ. Press [Google Scholar]
/content/journals/10.1146/annurev-polisci-042114-015008
Loading
/content/journals/10.1146/annurev-polisci-042114-015008
Loading

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error