Income inequality has led to an erosion of democracy in countries around the world

A study in PNAS sheds light on why democracy is more often threatened by elected presidents and prime ministers in the 21st century than by military coup-makers.

By Sarah Steimer

Political commentators, academics, and others have been wringing their hands over threats to democracy in recent years, and 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 PNAS, this large cross-national statistical study shows economic inequality is one of the strongest predictors of where and when democracy erodes — and even wealthy and longstanding democracies are vulnerable if they are highly unequal.

Study coauthor Susan Stokes, the Tiffany and Margaret Blake Distinguished Service Professor in the Department of Political Science, says 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 threats to democracy in two dozen countries, by way of power-grabbing elected heads of government?

“One of the things that clearly has happened in recent decades is globalization,” Stokes says. “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 kinds of leaders who were coming into office and then eroding their democracies were those who relied on some degree of grievance, frustration, or nihilism among the populace with regard to “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 inquality in countries that have experienced democratic erosion or backsliding and those that have not, and find a robust statistical association between the two.

The researchers also traced the link between income inequality 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 says. They 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. 

Stokes says that many in the U.S. may get the sense that the country is uniquely burdened by threats to our democracy, but she says it’s important that people have a sense of this being a much broader phenomenon of this time in history — not just of the U.S. right now. 

“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 says. “Part of the message is, 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.”

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