Wealth Inequality and Democratic Representation

“Votes count, but resources decide” Stein Rokkan asserted many years ago. Research on the effect of economic inequalities on politics is gaining momentum as the rising concentration of wealth is one of today’s most widely discussed and controversial issues. An extreme and deepening divide of economic resources can undermine essential pillars of modern democracies. It does not only bereave the poor of an important safety net, but there are wider societal repercussions, including political inequalities. While there is an increasing interest in how economic inequalities translate into political ones through classical forms of participation such as voting and party membership, the role of party finances has remained at the margins of this discussion. It is the objective of this paper to gauge the political consequences of wealth inequality upon democratic politics through private party funding. The paper starts by providing theoretical considerations on the role of money for democracies. While money enables the very functioning of democracies, skewed ownerships of wealth may inject the economic inequalities of the marketplace into the sphere of political rights. Adopting a mixed method design, the paper then provides empirical evidence on two aspects. First, based on quantitative comparative data, I explore to what extent democracies have been able and willing to restrict the private influence of political finance in the context of rising wealth inequality. While private funding responds to over 75 percent of overall party finances in some democracies, it constitutes less than 10 percent in others. Have governments been able to restrict the influence of the economic elite through stricter private funding regulations or has private campaign funding increased? Second, based on a comparative case study design, I explore if wealth inequality has shifted the resources between political parties, particularly from the Left to the Right. After all, wealth is more concentrated among the electorate of the latter. The paper aims to provide a better understanding of the enabling role of private money for democracies, but also to draw attention to the potential risks that wealth inequality may have for democratic representation .