The economic effects of democratic participation

In: CESifo working paper series 656

Abstract

Considerable concern has been expressed in resent years about declines in voter participartion rates in the United States and in several other major democratic countries. Some feel low participation rates intropuce a "class bias" into the political process and thereby worsen the outcomes from it. Little empirical work exists, however, that measures the effects of lower participartion on the felfare of country. This paper begins to fill this void. It presents cross-national evidence that high level of democratic participartion are associated with more equal distributions of income. The paperś results also imply, however, that this reduction in income inequality comes at a cost. High partcipartion rates are related to larger government sectors which in turn lead to slower economic groth. We also present ecidence of the "capture" of government by upper income groups in Latin and Central American countries.