Democracy and Redistribution, 1880-1930: Reassessing the Evidence

Abstract

The gospel of political economy preaches that extending the franchise leads to greater government redistribution. This belief is rooted in an obvious contrast: autocracies restrict participation to an elite few, while democracies allow the poor greater voice. Logically, because there are always more poor people than rich people, franchise expansion lowers the income of the average voter, and raises the demand for redistribution of wealth. By the beginning of the 19th century, politicians and political philosophers across the political spectrum believed universal suffrage would lead to the equalization of property.

This syllogism - between political and economic equality - has dominated the fears and the hopes attached to democracy ever since in the inception of representative government (Przeworski 2009, 301). Democracy may only mandate political equality, but since the late 1700s those on the right feared that political equality would threaten property - and likewise, those on the left believed that acquisition of political rights would not satisfy those on the bottom of the economic ladder. By Marx’s time, the idea had spread that “democracy in the political realm must naturally lead to social and economic equality” (ibid, 303).

Despite the persistence of vast socioeconomic inequalities in democracies around the world, belief that democracy and property are in tension remains rock-solid. In 1981, Meltzer and Richard helped formalize the “redistributive” model of democratic politics. They noted that not only does universal suffrage mean that a majority of voters earn less than average income, but also that pressures for redistribution will vary with economic inequality. The formalization of the redistributive model sparked an avalanche of research seeking to explain cross-national variation in patterns of government spending - both within democracies as well as between democracies and dictatorships. To scholars’ surprise, results of this research have consistently questioned the gospel truth that democracies redistribute more than autocracies and that inequality is correlated with pressures for redistribution. Scholars have repeatedly found that democracies redistribute far less than they “should” - a puzzle that pushed some to add epicycles to the original model in an effort to salvage their faith that a tension between democracy and property truly exists. Scholars have proven unwilling to give up on the Meltzer-Richard model, leading Adam Przeworski (2010, 85) to sardonically call it “political economists’ favorite toy.”