Income and policy choices: Evidence from parliamentary decisions and referenda
Graphical abstract
Introduction
Does income matter for political representation? In principle, democracy rests on the notion that citizen’s preferences should count equally. But a popular belief is that preferences of the rich count more. The literature on income and representation by individual legislators offers inconclusive evidence (see Bartels, 2008 and Bhatti and Erikson, 2011). A major challenge is to elicit preferences of voters with different incomes concerning policy proposals and confront them with actual policy decisions by legislators (see Brunner et al., 2013).
We overcome this challenge by matching revealed preferences of voters with different incomes with decisions by individual legislators. In Switzerland, voters regularly reveal their policy preferences in referenda. Post referendum surveys allow identifying referendum decisions of low, middle, and high-income voters. Legislators decide in parliament on the identical issues as voters in referenda. Thus, we directly observe the extent of congruence between legislators’ decisions and preferences of voter income terciles on identical policy proposals. While revealed preferences of low, middle, and high-income voters are highly correlated (), legislators represent the preferences of high-income voters on average with a 2.3%-points and a 4.0%-points higher probability than the preferences of middle-income and poor voters, respectively. Moreover, representation varies with party affiliation: Legislators from left parties have higher congruence levels with the poor than with the rich, while the opposite holds for legislators from center and right parties. Legislators from center parties have the highest congruence levels with all income groups. Finally, analyzing a subsample of voters who are self-declared party supporters reveals that the legislators more closely match their party supporters than non-supporters. Within party supporters, congruence levels of legislators of the respective parties increase with voter income.
Section snippets
Policy preferences of income groups and political decisions
To analyze whether political representation depends on income, we must know how individual legislators decided on a large number of policy proposals and map their decisions to preferences of voters with different incomes. In Switzerland, as in other democratic countries, legislators decide on policy proposals. However, Swiss voters can demand a referendum on any parliamentary decision on laws, and they can advance proposals for constitutional amendments. Signature requirements are low and
Congruence levels
Table 1 evaluates political representation of low, middle, and high-income.
Panel (a) shows that average congruence between legislators’ decisions in parliament and the voters’ preferences increases with income. The average congruence level between individual legislators and poor voters amounts to 62.6%, while it is 2.3%-points higher for middle-income voters (64.9%), and even 4.0%-points higher for the rich (66.6%).2
Conclusions
We evaluate whether the political representation depends on incomes of voters. By matching individual legislators’ decisions with referendum choices of low, middle, and high-income voters, we obtain a direct and natural measure of congruence. We distinguish representation of income groups by legislators with different party affiliation (left, center, right) in a multi-party institutional environment as typical for European countries.
On average, high-income voters tend to be better represented
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