How income inequality threatens democracy

Income inequality threatens democracy by depressing trust in political institutions. To better understand why, Simon Bienstman, Svenja Hense and Markus Gangl argue that we should pay attention to inequality’s negative effect on citizens’ evaluations of the democratic process

Rising income inequality and the threat to democratic support

Towering figures in the social sciences, from de Tocqueville to Robert Dahl and Seymour Martin Lipset, have theorised that inequality produced by economic activity has the potential to threaten the very foundations of democratic systems. Economic inequality has been rising in many advanced democracies over recent decades. So the question of whether inequality may undermine citizens' democratic orientations has once again emerged as a central issue in political science.

By now, the link between income inequality and indicators for democratic support, such as satisfaction with democracy or political trust, has been empirically documented in a wide variety of contexts. And yet, the discipline has not yet clearly identified the mechanisms behind this relationship.

Why would inequality erode political trust?

Why should inequality matter for political trust? The prevailing perspective regards trust in institutions as the consequence of a conscious evaluation process on the citizens' side. Income inequality is then seen as but one output of democratic governance, which citizens evaluate in view of their political preferences. Citizens then extend trust when they conclude that the political system is meeting their demands.

The prevailing perspective holds that citizens extend trust when they conclude that the political system is meeting their demands

The seminal study by Christopher J. Anderson and Matthew M. Singer supports this view. It shows that inequality depresses trust in institutions primarily among left-wing citizens – those we can expect to regard economic inequality as a salient political issue. A puzzle that remains, however, is that inequality also diminishes trust among centrist and right-wing citizens, who are not typical adherents of egalitarian ideology.

Solving the puzzle

So why would citizens who are unlikely to consider economic equality a primary political goal become dissatisfied and distrustful in reaction to economic inequality? We propose that inequality influences citizens' trust in democratic institutions through more than just the aforementioned substantive or output-based evaluation. A second, process-oriented type of assessment also comes into play, and operates relatively independently of political orientations.

Our argument draws on a venerable tradition of political theorising, which sees inequality as potentially threatening democratic fundamentals by translating into unequal political resources. This then becomes disparate political influence, representation, and responsiveness.

Economic inequality may affect citizens' perceptions of the responsiveness of the political system and of their own potential to influence political processes

From this perspective, economic inequality may affect citizens' perceptions of the responsiveness of the political system. It may also affect their perception of their own potential to influence political processes. These perceptions, captured by measures of external efficacy, represent subjective assessments of the fairness of democratic procedures. When inequality undermines the democratic norm of political equality, it may depress external efficacy irrespective of political orientation. It could thus explain why inequality erodes trust even among those for whom economic equality is not a politically salient goal.

Testing the theory

In a recent study, we show that increasing income inequality leads to decreasing political trust. Furthermore, we can, to a considerable extent, explain this relationship through inequality’s negative effect on perceptions of external efficacy.

Besides, our results also speak to a remaining direct effect of inequality that cannot be attributed to efficacy. We summarise this in the path diagram below. This effect we do primarily find among the political left. The direct effect of inequality on trust thus depends on respondents’ political ideology. Our finding is very much in line with the assumption that left-leaning citizens react more sensitively to economic inequality because of its political significance for them.

Yet this ideological moderation is not evident when we look at efficacy. Left- and right-leaning citizens alike experience a decline in external efficacy as economic inequality increases. Where this reduction in efficacy is perceived, it then triggers similarly negative responses in terms of political trust.

Income inequality, external efficacy, and political trust, among left-leaning and centre or right-leaning citizens.
Source: Bienstman, S., Hense, S., and Gangl, M. (2023)
Explaining the ‘democratic malaise’ in unequal societies: Inequality, external efficacy, and political trust, published in the European Journal of Political Research

Taken together, these findings corroborate and complement the dominant view. Inequality does indeed depress trust via an outcome-based mechanism, as shown by the direct effect depending on political orientation. At the same time, our findings reveal the importance of the more process-based mechanism. This is the largely non-partisan indirect effect transmitted via efficacy.

A broader perspective on inequality's effects

Indeed, objective economic inequality has the potential to erode democratic support, and external efficacy plays a key role therein. As we see it, the evidence for these political ramifications underlines the importance of policies aimed at mitigating economic disparities. At the same time, this suggests that interventions or actual political experiences that raise perceptions of efficacy could help offset the corrosive impact of increasing income inequality.

Political experiences that raise perceptions of efficacy could help offset the corrosive impact of increasing income inequality

A perspective that recognises this efficacy-based mechanism – and places citizens' evaluation of political power and fair democratic processes alongside the conventional perspective of output-based evaluations – may contribute to political sociology more generally. This perspective draws attention to the largely non-partisan transmission via citizens' efficacy perceptions. It helps us explain the empirical puzzle of why inequality also depresses political trust among right-leaning citizens, who presumably consider (rising) inequality less problematic.

This broader perspective therefore enriches the venerable argument that the translation of economic inequality into political inequality may threaten democratic stability.

This article presents the views of the author(s) and not necessarily those of the ECPR or the Editors of The Loop.

Contributing Authors

photograph of Simon Bienstman Simon Bienstman PhD Candidate, Institute of Sociology, Goethe University Frankfurt More by this author
photograph of Svenja Hense Svenja Hense Independent Scholar More by this author
photograph of Markus Gangl Markus Gangl Professor of Sociology, Goethe University Frankfurt More by this author

Share Article

Republish Article

We believe in the free flow of information Republish our articles for free, online or in print, under a Creative Commons license.

Creative Commons License


Leave a Reply

Your email address will not be published. Required fields are marked *

The Loop

Cutting-edge analysis showcasing the work of the political science discipline at its best.
Read more
Advancing Political Science
© 2024 European Consortium for Political Research. The ECPR is a charitable incorporated organisation (CIO) number 1167403 ECPR, Harbour House, 6-8 Hythe Quay, Colchester, CO2 8JF, United Kingdom.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram