Divide and Deal: The Politics of Distribution in Democracies

Introduction

1 Introduction 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 had not done at the barricades. And this expectation of democracy was not limited to the nineteenth century. Millions of marginalized citizens greeted the “third wave” of democracy that swept across the global South in the last decades of the twentieth century with jubilation and hope. Political equality, it was widely believed, would naturally enhance economic equality. Much academic writing has also assumed that majority rule with a universal franchise would lead to economic redistribution—at least in countries where income and wealth are as unequally distributed as they are in modern capitalist systems. Meltzer and Richard (1981) formalized this intuition through the median voter theorem, which holds that economic policy will reflect the preferences of the voter located at the median point of the income distribution. Given an unequal starting point and self-interested voters, it seemed to stand to reason that downward redistribution would continue until the income of the median voter reached that of the mean. Although appealing for its parsimony and its intuitive predictions, the median voter theorem has proven strikingly unsuccessful 2 Ian Shapiro, Peter A. Swenson, and Daniela Donno at explaining reality. Deep inequalities persist, both in established democracies with institutionalized welfare states and in the younger democracies of the developing world. There seems to be no systematic relationship between expanding the franchise and downward redistribution. Indeed, majority rule democracy can coexist with regressive redistribution in capitalist systems. Nineteenth-century elites need not have feared democracy, and the left, it seems, put too much faith in it. This reality has real consequences for millions of people across the globe who expect democracy to ameliorate injustice. In recent years, we have witnessed increasing public frustration at the inability of governments to provide for basic needs and stem the widening gulfs between rich and poor. Governments the world over also fail to insure against economic losses due to the punitive effects of labor markets on childbearing, childrearing, bodily injury, physical and mental illness, skill obsolescence, and the infirmity of old age. Americans need look no further than the scenes from New Orleans in the aftermath of Hurricane Katrina to understand the depth of the problem within our own borders. Poverty and exposure to further loss go hand in hand. Of course, the kind of poverty exposed by Hurricane Katrina is a minority phenomenon, in both a numerical and an ethnic sense, so there is perhaps no profound political puzzle in its tenacity in the face of majority rule. However, even majorities regularly lose out in distributional politics . The continuing failure to pass universal health insurance legislation —when strong majorities at the electoral and elite levels agree on its necessity —is a puzzling political failure of democracy in the United States. Conventional economic theory discerns market failure in the inefficient underprovision of private, voluntary health insurance; political analysis is needed to explain political failure in remedying the market failure. In this case, and therefore perhaps in many others, democratic politicians consistently underperform in acting on behalf of majorities. It is therefore all too apparent that our understanding of the forces that drive distributive politics is woefully inadequate. The mismatch between theory and reality suggests that the complex web of motivations, actors, issue areas, and institutions in the political world is simply not captured by the assumptions informing the median voter theorem and its progeny. Fresh thinking and empirical research are needed. This volume explores how processes at the institutional, group, and individual levels contribute to the often surprising twists and turns of distributive politics. The chapters explore a variety of psychological and Introduction 3 institutional factors, collective action problems, and policy-design challenges that influence distributive politics. The contributors present different perspectives on a crucial question: redistribution of what? Research on the distribution of...