Local Economic Inequality and Political System Support

• In Event: Public Attitudes and Confidence in Democracy

Abstract

Does economic inequality breed alienation from the political system? It is a long-standing debate within political science whether economic inequality leads to dissatisfaction with democracy and a concomitant distrust in politics and the state—what may broadly be labeled "political system support". In short, the argument is that high economic inequality signals that the democratic system does not deliver on an equal distribution of resources, which, in turn, fosters the perception, among large segments of society, that the government does not work for them. In response, they become less supportive of democracy as a form of governance, as well as less trustful of its central institutions. Extending this reasoning, those to whom inequality is the biggest disadvantage—i.e., those on the bottom of the income distribution—could be expected to be more disapproving of the political system than those on top, who ostensibly benefit from it. Previous empirical work indicates that economic inequality might indeed have harmful consequences for political system support. Across indicators of political system support, including satisfaction with democracy, political trust, and external efficacy, the general finding is a negative relationship between economic inequality and citizens' support for the political system (if not for the auxiliary proposition that the link is stronger for the less economically privileged). However, common for all existing studies of the relationship between economic inequality and political system support is that they investigate the effect of inequality at a very aggregate level—nations or highly aggregate regional units such as US states. This is problematic given recent work finding that people have very little understanding of inequality at the national level/highly aggregate regional levels, which, in turn, challenges claims about its negative effects. The lacking correspondence between national-level inequality and perceptions of inequality likely reflects that highly aggregate contextual measures are poor measures of everyday experiences due to, inter alia, segregation along income lines. Tackling the problem arising from the aggregate nature of previous work, this paper sets out to provide a rigorous test of the potential effect of economic inequality on disaffection with the political system, by studying inequality at the local level, where it is palpable and, therefore, likely consequential. It does so by linking several geo-referenced public opinion surveys—both cross-sectional and longitudinal—to granular registry data in Denmark; a country with an equal national distribution of income, but with a large variation in local-level inequality, an ideal context for a strong test of the link between inequality and political system support. This setup enables us to create a range of “micro-contextual'' measures of local economic inequality—spanning radii between 100 and 1.000 meters around a respondent’s place of residence—connected to individual indicators of political system support. This flexible approach also allows us to explore a range of indicators of local economic inequality (e.g., Gini coefficients based not only on income, but also wealth, and values of cars). Further, the analysis employs both cross-sectional and panel data, accounting for various time-invariant and time-varying sources of confounding. In sharp contrast to existing work, we find little evidence to support the claim that local inequality reduces political system support regardless of the measure of inequality employed. We also do not observe any systematic relationships when subsetting the analysis by socio-economic groups (low-, mid-, and high-income individuals). This result questions extant claims about the negative consequences of inequality for political system support. While this might be taken as an argument to condone high economic inequality, it also indicates, more optimistically, that economic inequality does not automatically cause alienation from politics, thereby raising the possibility of channeling grievances through the democratic process.

Authors

• Francesco Colombo, Aarhus University

• Peter Thisted Dinesen, University College London

• Kim Mannemar Sønderskov, Aarhus University

• Francesco Colombo, Aarhus University