When Does Income Inequality Cause Polarization?

Abstract

Income inequality has increased across developed democracies in the past thirty years (Piketty, 2014). Conventional wisdom suggests that high income inequality should be associated with political parties taking polarized positions as the left struggles to increase redistribution to its relatively poor voters while the right aims to entrench the position of economic elites (Meltzer and Richard, 1981; Han, 2015; Winkler, 2019). However, this general argument masks substantial within-country and cross-sectional variation. I argue that the connection between party positions and income inequality is contingent upon the construction of partisanship and the content of national elections. This thesis uses data from European national elections from 1996 to 2016 to show that when partisanship is expressed along economic lines - as indicated by a high degree of income differentiation between parties - and when economic issues are salient, the predicted effect of income inequality holds. When these factors are weak, however, income inequality has no discernible relationship with polarization.Master of Art