We re-analyse four major explanations of redistribution including the Meltzer-Richard model, power resources theory, Iversen-Soskice’s political institutions explanation, and Lupu and Ponstusson’s skewness theory. For each of these, we reconsider the causal chain and test their assumptions using a comprehensive, original dataset on working-age income-inequality consisting of 589 country-years for affluent democracies in the period 1963–2019. We find that partisan governments are directly related to redistribution and have a strong effect on the generosity of social policy. Lupu and Pontusson’s skew measure has no effect on redistribution in models with controls but does have a positive effect on generosity of social policy. Finally, we find that the mean-to-median income ratio has a consistent, negative, and highly significant effect on redistribution, directly refuting the very premise of the Meltzer-Richard model.

The last three decades have witnessed rising inequality and deepening financialization in post-industrial democracies. A rapidly growing literature has linked these two phenomena. We go beyond existing scholarship by specifying which aspects of financialization can be expected to increase inequality and where in the income distribution this effect will occur. We also show that this effect is contingent on institutional context. We posit that the shareholder model of corporate governance and the growing demand for financial professionals are the two dimensions of financialization that drive up pre-tax income inequality. Nevertheless, the spread of the shareholder value model only benefits the very top income earners. We further argue that the institutional strength of labor shapes the relationship between financialization and inequality. We analyze effects of indicators of these two dimensions of financialization on the top 1% and the next 9% income shares and on the 90:50 earnings ratio. We test our hypotheses with data on 18 post-industrial democracies between 1960 and 2015.

Chapter Five. Successful Social Policy Regimes? Political Economy, Politics, and Social Policy in Argentina, Chile, Uruguay, and Costa Rica was published in Democratic Governance in Latin America on page 155.

Abstract:This article explores the determinants of relative market income poverty and poverty reduction among the working age population in 22 advanced industrial democracies. The article revisits Moller et al. (2003) but goes beyond the earlier study in four major ways. First, we are able to measure welfare state effort with social rights rather than expenditure. This allows us to separate the effect of policy from need, which jointly shape expenditure. Second, we bring the analysis up to date, covering some 10–15 more years, which allows us to compare our findings to those of the earlier study and to compare the periods before and after 2000. Specifically, we discuss the declining effectiveness of the welfare state in reducing poverty and the declining importance of partisan incumbency. Third, we pool data from three sources, the Luxembourg Income Study (LIS), the Organization for Economic Cooperation and Development (OECD), and Eurostat Statistics on Income and Living Conditions (SILC), to almost triple the number of observations for analysis compared to past analyses. Fourth, we use newer estimation techniques that deal better with serial correlation. We show that the primary determinants of market income poverty are volume of work as a result of economic and demographic factors, as well as remuneration of work at the bottom of the income distribution driven by labor market institutions. We then show that the main determinants of poverty reduction are social rights; controlling for social rights, need variables are important for explaining poverty reduction as well.

The rise of the super-rich has attracted much political and academic attention in recent years. However, there have been few attempts to explain the cross-national along with the temporal variation in the rise of top incomes. Drawing on the World Wealth and Income Database, we study the income share of the top 1% in current postindustrial democracies from 1960 to 2012. We find that extreme income concentration at the top is a predominantly political phenomenon, not the result of increasing marginal productivity of top managers in markets of increasing size. Top income shares are largely unrelated to economic growth, increased knowledge-intensive production, export competitiveness, financialization and wealth accumulation, though they are related to stock market capitalization. Instead, they are closely associated with political and policy changes such as union density and centralization, secular-right governments, top marginal tax rates and investment in public tertiary education.

The last three decades have witnessed rising inequality and deepening financialization (however defined) in post-industrial democracies. A rapidly growing body of literature has linked the two phenomena (see e.g. Dunhaupt 2014, Godechot 2016, Flaherty 2015, Roberts and Kwon 2017). Contrary to existing scholarship, which has largely neglected the mediating effect of institutions, we argue that contextual differences play a crucial role in shaping the relationship between financialization and inequality. Drawing on the Varieties of Capitalism literature, we posit that a larger financial sector is associated with a more unequal distribution of income in liberal market economies, where the industry develops substantial autonomy from other actors. In contrast, the stronger position of labor in coordinated market economies is able to counteract the inequality-enhancing effects of financialization. We test these hypotheses with data on 18 and 21 post-industrial democracies between 1960 and 2013. Our analysis is largely consistent with our expectations.

Starting from the assumption that the aim of development is to increase human flourishing, this paper develops an analytical perspective on how effective states are built. Modern theories of development see the state as the key agent for delivering the most critical forms of productive investment – investment in capability expanding collective goods. Accomplishing this requires bureaucratic capacity, as earlier analyses of state effectiveness have argued, but state-society relations are equally crucial. We focus on the “Sen-Ostrom” model – deliberative mechanisms to specify goals plus engagement of communities as “co-producers” of services – as the key elements of effective state society relations. Our effort to identify institutions and strategies that might lead to the efficacious engagement of the broadest possible cross-section of the populace led us to a re-engagement with left social democracy. But, resuscitating traditional models of left social democracy is not sufficient; different contexts require new conceptualizations. Patrick Heller’s “state-civil society model” and Cheol-sung Lee’s “embedded cohesiveness/political network model” gave us tools for revising, deepening and extending the basic party-union dynamics of the traditional left social democratic model. Putting the Huber-Stephens analysis of left social democracy together with the Heller and Lee models offers a promising platform for future debate on the general political logic of state-society relations.

The literature on welfare states or, more modestly, systems of social protection, has expanded rapidly over the past few decades. Since the publication of the first edition of this Handbook, major progress has been made in three research areas: the relationship between welfare states and production regimes, gendered determinants and outcomes of welfare state regimes, and the distributive outcomes of welfare states. Esping-Andersen ended his chapter in the first edition with a call for an embedded approach to the study of welfare states, for a relational analysis of the welfare state – economy nexus. Two developments have contributed to the advancement of such an approach: progress in research on production regimes in advanced industrial societies, and the dramatic impact of economic transformations on the systems of social protection in ex-communist countries and in Latin America. Progress in research on the gender dimension of the welfare stateeconomy nexus has been spurred by changes in demographic structures, particularly falling fertility rates and the decline of the traditional male breadwinner family that had been at the center of many welfare state programs. Finally, progress in research on distributive outcomes has been heavily driven by the greater availability of reliable and comparable data and new statistical techniques, specifically the Luxembourg Income Surveys and techniques for the analysis of unbalanced panel data.