Political Reinforcement: How Rising Inequality Curbs Manifested Welfare Generosity

ERLING BARTH, HENNING FINSERAA, KARL O. MOENE
AMERICAN JOURNAL OF POLITICAL SCIENCE (2014). ADVANCED ONLINE PUBLICATION. DOI: 10.1111/ajps.12129

How does rising inequality affect political parties? Do they adopt programs for more redistribution? In particular, do left parties act as the main guardians of the welfare state in times of increasing inequality? The conventional approach suggests that all political parties aim at more welfare spending as inequality rises, redistributing more income from the rich to the poor. This paper contests this view, suggesting, instead, that political parties, and in particular left parties, move right when inequality rises.

The authors propose a political reinforcement hypothesis, suggesting that rising inequality moves party politics on welfare state issues to the right, strengthening rather than modifying the impact of inequality. Tbey model policy platforms by incorporating ideology and opportunism of party members and interests and sympathies of voters. If welfare spending is a normal good within income classes, a majority of voters moves rightward when inequality increases. As a response, the left, in particular, shift their welfare policy platform toward less generosity. They find support for their arguments using data on the welfare policy platforms of political parties in 22 OECD countries.