The Redistributive Threat: State Power and the Effect of Inequality on Democracy

Several prominent recent works in comparative politics explore the relationship between democracy and economic inequality, centring on the expectation by economic elites that democratisation will lead to the redistribution of elite wealth. But, in practice, state extractive capacity is necessary for redistribution. Where extractive capacity is lacking, rational economic elites should not fear that the loss of political power would lead to effective redistribution. Thus, the effect of inequality on regime outcomes is conditional on state capacity. This prediction is confirmed through replication and extension of the analysis in Boix (2003), with the addition of the presence of a regularly implemented national census as a proxy for state extractive capacity. In strong states, the negative effect of inequality on regime change is confirmed. But, where the state is weak, inequality is shown to have no effect on regime change. This finding has empirical and methodological implications for the cross-national analysis of political change.