Media Briefings

Economic Inequality Drives A Country’s Political System

  • Published Date: March 2010

Countries with greater inequality are more likely to have a ‘majoritarian’ constitutions – either presidential systems as in the United States or parliamentary systems with ‘first-past-the-post’ elections as in the UK. More equal societies are more likely to adopt consensual systems – parliamentary democracies with proportional representation.

These are among the conclusions of research by Davide Ticchi and Andrea Vindigni, published in the March 2010 Economic Journal. They also find that consensual democracies are more likely to be ruled by centre-left coalitions – and to have more redistribution and bigger governments. The right have the advantage under majoritarian constitutions – and these countries have lower levels of redistribution and smaller governments.

The study presents a theory of the choice of democratic constitutions based on economic fundamentals. It shows that the degree of income inequality in a society may affect the constitutional choice.

In particular, the researchers demonstrate that countries with high income inequality are more likely to choose a majoritarian constitution – that is, a parliamentary regime with a majoritarian electoral system or a presidential regime. More equal societies are more likely to adopt consensual systems – parliamentary democracies with a proportional electoral system.

The analysis also shows that consensual democracies should be expected to be ruled more often by centre-left coalitions, while the right should have an advantage under majoritarian constitutions. This in turn helps to explain the well-known empirical finding that majoritarian systems are often associated with lower levels of redistribution and, in general, with smaller governments.

The researchers consider a society composed of three groups: the poor, the middle class and the rich. The analysis leads to the conclusion that the rich are more likely win the elections in majoritarian systems as the poor prefer the rich representative to the middle class one. This is because once they are in power, both rich and middle class representatives do not provide the public goods preferred by the poor, but the former tax them less.

The analysis also shows that the ruling coalition in consensual democracies depends on the level of inequality in the society. When inequality is low, it is more likely that the coalition is made up of the middle class and the poor. When inequality is high, there will be a middle class and rich coalition in power.

At the moment of constitutional choice, the rich will always prefer the majoritarian system and the middle class the consensual one. The poor will be the swing voters when the constitution is chosen by majority voting.

When inequality is low, the poor will choose the consensual system because they know that they will be part of the ruling coalition. When inequality is high, they will prefer the majoritarian system: they prefer the rich to a coalition between the rich and the middle class because the former are more conservative and tax them less.

The authors discuss these results in historical perspective. They also propose an empirical analysis confirming the theoretical results and showing the positive correlation between income inequality and choice of a majoritarian constitution.

In a sample of 73 democracies, they find that countries with more unequal societies at the moment of constitutional choice are more likely to choose a majoritarian system.

In particular, in a sample of parliamentary democracies, they find that majoritarian democracies had an income inequality level 10 percentage points higher than consensual ones, and that, on average, an increase of one point in inequality increases the probability of adopting a majoritarian system by 3%.


Notes for editors: ‘Endogenous Constitutions’ by Davide Ticchi and Andrea Vindigni is published in the March 2010 issue of the Economic Journal.

Davide Ticchi is at the University of Urbino. Andrea Vindigni is at Princeton University.

For further information: contact Romesh Vaitilingam on 07768-661095 (email:; Davide Ticchi via email:; or Andrea Vindigni via email: vindigni@Princeton.EDU