The Political Economy of Wealth Inequality

Session Submission Type: Full Paper Panel

Session Description

This panel explores the political economy of wealth by considering the influence of different socioeconomic wealth cleavages, including those defined by class, race, or ethnicity on a variety of important political outcomes. It brings together scholars with different perspectives from a diverse set of backgrounds and seeks to highlight the benefits of approaching these questions from different methodological perspectives and drawing on evidence from familiar and less familiar empirical cases.

Political scientists have devoted considerable attention in recent years to understanding the political causes and consequences of rising economic inequality within countries, including in many advanced democracies. Most of this work has addressed the politics of income inequality, even though wealth inequality is much higher and growth in income inequality has recently slowed in many countries.

A growing literature has thus begun to focus on the political economy of wealth, to which this panel is devoted. This new concern with the politics of household balance sheets reflects a number of important long-term developments, including the dramatic growth of household assets in advanced and some emerging economies over the past decades, especially housing, pension, and other financial assets; the uneven financialization of the household sector within and across countries, associated with a rising dependence on credit and financial markets for important groups; the increasing scope and depth of policy interventions that protect and redistribute wealth within societies; and a growing disciplinary conviction that democratic institutions may actually be contributing to rising inequalities, rather than favoring greater wealth equality.

These developments have also been linked to important socio-political outcomes, including voting behavior, the emergence of new social movements, rising social stratification, political populism, the democratic recession, and partisan realignments. They have also helped to resurface and throw new light on older debates about the political causes and consequences of between-group inequality (class, racial or ethnic, generational, and gender), social (im)mobility, the politics of social protection, redistribution, and public goods provision, and the links between wealth inequality and socio-political stability and change.

This panel contributes to this growing literature on the political economy of wealth. The papers explore how wealth cleavages influence voting behavior and policy preferences. The first set of papers studies how ethnic or racial wealth inequalities shape political preferences. Björn Bremer, Jeffrey Chwieroth, and Andrew Walter use survey experiments in Australia and the UK to explore how people assess the trade-off between protecting household wealth (especially housing and financial assets) in economic crises and exacerbating inequality between asset-poor and asset-rich groups. They consider how the provision of information about the impact of policy interventions differs for class and racial/ethnic wealth inequality, and how this shapes attitudes towards wealth protection policies. Rhea Myerscough studies policy preferences towards payday lending in the US, where payday loans are disproportionately used by Black consumers. In her paper, she considers how this context shapes attitudes toward their regulation. She uses data from an original survey of Black and white individuals living in areas with a significant industry to test the relationship between race, personal experience, and attitudes.

A second set of papers focuses on other forms of economic segregation. In the comparative capitalisms tradition, Pascal König and Alexander Reisenbichler consider how economic institutions could influence how homeowners view house price changes, which are a major driver of wealth inequality. They provide evidence from a survey experiment that British and German homeowners have sharply different attitudes towards economy-wide house price rises, implying country-specific sociotropic perceptions of wealth inequality. In his paper, Andreas Weidemann asks how the rising spatial segregation of rich and poor households in Germany influences voters’ partisan and public goods preferences. He uses fine-grained municipal-level data and survey evidence to consider how these preferences are influenced by local social capital.

Two brilliant scholars have agreed to provide initial comments on the papers to stimulate debate: Asli Cansunar and Patricia Posey. Afterward, Ben Ansell will chair an open debate on these issues that are of pressing scholarly and practical concern.

Sub Unit

• Division 55: Class and Inequality

Chair

• Ben William Ansell University of Oxford

Discussants

• Asli Cansunar University of Washington

• Patricia Posey University of Chicago

Individual Presentations

• Class, Ethnicity, and Inequality: Public Support for Wealth Protection Policies - Björn Kristen Bremer, Central European University; Jeffrey M. Chwieroth, London School of Economics; Andrew Walter, School of Social and Political Sciences, University of Melbourne

• Who Wants to Ban Payday Loans? How the Racial Wealth Gap Shapes Policy Attitudes - Rhea Myerscough, Butler University

• How Do Voters React to Rising House Prices? Evidence from Germany and the UK - Alexander Reisenbichler, University of Toronto; Pascal König, TU Kaiserslautern

• Economic Segregation and Social Capital in Germany - Andreas Wiedemann, Princeton University