Technological Change, Inequality, and the Future of Democracy

• In Event: The Political Economic Origins of Democracy

Abstract

Rising inequality, arguably triggered by technological change and globalization, has sparked a growing debate on the future of democracy across the world (Przeworski 2018, Treisman 2019, Levistky & Ziblatt 2018). We address this debate and a much broader discussion on the foundations of democracy by modelling the choice of political institutions as a function of level of income and of income distribution. We show formally that high inequality reduces democratic stability, that high income moderates the effect of inequality, and that economic shocks are particularly dangerous to democracy at low income levels. In the model, we link the evolution of income mean and variance to technological change (inequality-enhancing in the 19th century and today; equality-enhancing during the 20th century). This allows us to offer a theoretical explanation for the empirical relationship between development and democratization found by the literature. We test the relationship between democracy, development and inequality using comprehensive data since the late 19th century.

Authors

• Pablo Beramendi, Duke University

• Carles Boix, Princeton University