When Does Income Inequality Cause Polarization?

Abstract

Scholars have long been concerned with the implications of income inequality for democracy. Conventional wisdom suggests that high income inequality is associated with political parties taking polarized positions as the left advocates for increased redistribution while the right aims to entrench the position of economic elites. This article argues that the connection between party positions and income inequality depends on how party bases are sorted by income and the issue content of national elections. It uses data from European national elections from 1996 to 2016 to show that income inequality has a positive relationship with party polarization on economic issues when partisans are sorted with respect to income and when economic issues are relatively salient in elections. When these factors are weak, however, the author finds no relationship between income inequality and polarization.