Economic inequality is a powerful predictor of democratic erosion, study finds

Political commentators, academics and others have been wringing their hands over threats to democracy in recent years. A new study helps us better understand one of the possible driving forces behind the erosion of democratic norms and institutions: economic inequality.

Published in the Proceedings of the National Academy of Sciences, this large cross-national statistical study shows economic inequality is one of the strongest predictors of where and when democracy erodes—even wealthy and longstanding democracies are vulnerable if they are highly unequal.

According to study co-author University of Chicago Prof. Susan Stokes, the research team was interested in situating the phenomenon of backsliding democracies in time: Why, in the early part of the 21st century, are we seeing power-grabbing, elected heads of government in two dozen countries?

"One of the things that clearly has happened in recent decades is globalization," said Stokes, the Tiffany and Margaret Blake Distinguished Service Professor in the Department of Political Science at UChicago. "And deregulation has been on the agenda for many countries in different regions of the world. One of the effects of that has been growing income inequality or persistent income inequality."

The researchers noticed the leaders who were coming into office and then eroding their democracies relied on grievance, frustration or nihilism among the populace regarding "elite" institutions. Their goal, then, was to understand whether unequal economic conditions are the backdrop to political polarization, along with grievance and skepticism about institutions.

For their study, the team followed the work of Melis Laebens, a political scientist at Central European University. Laebens conceptualized democratic backsliding and how to identify democratic erosion.

As did Laebens, Stokes and her co-author—Eli G. Rau of Tecnologico de Monterrey—used data from the Swedish project Varieties of Democracy (or V-Dem Institute), to find cases of democratic erosion, excluding more conventional instances in which presidents and prime ministers test the limits of executive power. They compared levels of income inequality in countries that have experienced democratic erosion or backsliding and those that have not, and found a robust statistical association between the two.

The researchers also traced the link between income inequality and democratic backsliding through increased partisan polarization, a widely identified cause of democratic backsliding. The more polarized the public is, the more willing a part of the public will be to turn a blind eye to presidents and prime ministers attacking the press, the courts and other institutions.

"Backsliding leaders play on inequality and deepen polarization by encouraging a sense of grievance among the public. Feelings of being left behind and alienation from elite institutions—backsliding leaders prey upon all of these," Stokes said.

These leaders do so by finding different targets to blame for the inequality. Left-wing, populist backsliders, for example, will blame corporations and economic leaders. Right-wing, ethno-nationalist backsliders might nurture grievances by blaming outsiders or immigrants.

Stokes says the team also explored whether the age of the democracy mattered for the resilience of democracy. But they found that older democracies were at no lower risk of backsliding. The level of institutionalization—or the ability of states to get things done—also wasn't clearly associated with backsliding. They did, however, find evidence of what they call contagion effects: other variables being equal, leaders in backsliding democracies have a tendency to influence one another.

Though many in the U.S. may believe the country is uniquely burdened by threats to our democracy, Stokes says it's important people understand this erosion as a much broader phenomenon of this time in history.

"It probably comes as a result, to some degree, of a period of globalization and deregulation, of neoliberalism in the 1990s and even earlier developments that have changed party systems—in a lot of countries—in the post-war period," she said. "Part of the message is that there are structural factors here, and it's important to understand what they are. If we're concerned with maintaining and improving our democracy, we should have those things in mind."

Stokes says considering structural, economic factors in the background to political developments shines a new light on economic policy priorities. As the study found, policies that improve income equality may have the political effect of also strengthening democratic systems.