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Social conflict theory anticipates that democracies should be more likely than autocracies to redistribute.1Majority rule allows poorer citizens to exert greater influence over the political economy than economic elites, therefore narrowing the gap between rich and poor through progressive taxes and social spending. Indeed, because political equality is supposed to usher in greater economic equality once the franchise is universal, democracy represents a credible commitment by elites to redistribution. Yet inequality and democracy are much more compatible empirically than social conflict theory predicts. While the distribution of income is right skewed throughout the world, redistribution from the rich to the poor is not higher in democracies than autocracies.2It is therefore not surprising that, even at the highest levels of inequality, democracy is not associated with redistribution.3
What explains the lack of a general relationship between democracy and redistribution? Despite the fact that there is often pressure from below for political reform,4concrete steps toward democracy - such as scheduling elections and relinquishing control over the security apparatus - are often initiated by the elites themselves.5Moreover, a democratic transition is more likely if elites manage to negotiate constitutional frameworks that continue to protect their interests after they exit.6In Western Europe during the nineteenth and early twentieth centuries, democratization proceeded in gradual, calculated steps that were intended to appease economic elites' fear of radical political change.7Similarly, economically powerful elites accepted democracy in Latin America when conservative parties protected their interests.8
There are two literatures that help us understand this puzzle. The first is a new generation of social conflict theory that argues that, even after a transition, elites may circumvent democratic institutions to capture policy making and block redistribution.9If elites' de facto power persists after democratization, they can engage in vote buying or clientelism that fractionalizes the political power of the poor.10The second is power resources theory, a dominant explanation of variation in the size and scope of welfare states in Organisation for Economic Co-operation and Development (OECD) countries. Korpi, Stephens and others argue that what are needed are strong unions that compress wage and salary distributions, thus lowering market inequality, and social...