Party Positions, Electoral Systems, and Income Inequality

Both income inequality and electoral systems impact political parties’ positioning on the left-right dimension. Meltzer and Richard (1981) show that an increase in income inequality leads to more extreme party position. They argue that this behavior helps parties to continue to serve their voters’ interests. Furthermore, Cox (1990), based on the median-voter-theory, presents electoral systems’ centrifugal and centripetal incentives for parties. We assume that these two independent variables both have a mutual impact on each other and, at the same time, influence party positioning on a left-right scale. We argue that an increase in income inequality leads to more extreme ideological positions only in those cases where electoral systems are permissive. Using a TSCS dataset to examine this interactive impact of income inequality and electoral system characteristics on parties’ programmatic positions, we find that this assumption applies. Parties only move to positions on the margins of the left-right dimension to accommodate more important income equality if electoral institutions provide them incentives to do so.