Democracy, Inequality, and Antitrust

• In Event: Historical Political Economy

Abstract

This paper investigates the relationship between democracy, inequality, and antitrust policy. Strong antitrust policies advance the economic and political interests of most citizens, making their adoption more likely in institutional settings that weigh the interests of voters. We examine the empirical relationship between democracy, inequality, and antitrust policies in a broad panel of countries from 1951 to 2010. Using a variety of identification strategies as well as case studies, we find that democracy is predictive of stricter antitrust policies in countries with low but not high levels of inequality. The result accords with the idea that economic inequality can undermine the democratic forces that tend toward stronger antitrust policy. We then investigate a supposed exception to this pattern: progressive era US reforms. Through a mixed-methods analysis, we present evidence that democracy and inequality shaped the politics of antitrust in this era in a way that resonates with our cross-country analysis.

Authors

• Michael O. Allen, Yale University

• Kenneth F. Scheve, Yale University

• David Stasavage, New York University