The Structure of Inequality and the Politics of Redistribution

Abstract

Against the current consensus among comparative political economists, we argue that inequality matters for redistributive politics in advanced capitalist societies, but it is the structure of inequality, not the level of inequality, that matters. Our theory posits that middle-income voters will be inclined to ally with low-income voters and support redistributive policies when the distance between the middle and the poor is small relative to the distance between the middle and the rich. We test this proposition with data from 15 to 18 advanced democracies and find that both redistribution and nonelderly social spending increase as the dispersion of earnings in the upper half of the distribution increases relative to the dispersion of earnings in the lower half of the distribution. In addition, we present survey evidence on preferences for redistribution among middle-income voters that is consistent with our theory and regression results indicating that left parties are more likely to participate in government when the structure of inequality is characterized by skew.