What Drives Unequal Policy Responsiveness? Assessing the Role of Informational Asymmetries in Economic Policy-Making

Abstract

Recent scholarship on inequality and political representation argues that economic elites are dominating democratic policy-making, yet it struggles to explain the underlying mechanisms. This article proposes that unequal responsiveness reflects asymmetries in information about fiscal policy across income classes, as opposed to being a structural bias inherent in capitalist democracy. I test the argument in a pathway case study of economic policy-making in Denmark, using a new data set that combines preference and spending data spanning 18 spending domains between 1985 and 2017. I find that governments that pursue standard macroeconomic policies coincidentally respond more strongly to the preferences of the affluent, owing to a closer adjustment of preferences to the state of the economy among citizens in upper income groups. These findings have important democratic and theoretical implications, as they suggest that unequal responsiveness may not reflect substantive misrepresentation of majority interests, but rather differences in information levels across groups.

Are Policy Analogies Persuasive? The Household Budget Analogy and Public Support for Austerity

“…The intuition behind our analysis is that those who pay little attention to politics are less likely either to have considered and developed the household analogy themselves, or to have been as strongly exposed to political and media messages encouraging its use. Once exposed, however, low-information citizens may be the most likely to be susceptible to analogical reasoning, ‘because people with limited knowledge and information are inclined to seek answers in familiar and easily understandable objects, such as the personal household budget’ Elkjær (2020, 10). To the extent that we accept this logic, we can assess the extent to which our null findings are driven by pre-treatment of the sample by exploring potential heterogeneity of treatment effects by political attention 16 .…”

Institutional Design and Policy Responsiveness in US States

“…14 These findings are consistent with previous research indicat- ing that policy responsiveness is stronger for social than economic policy (Caughey & Warshaw, 2018). Whether this dynamic is driven by the public having less defined economic policy views, or by a greater divergence between the affluent and general public on economic policy (Gilens, 2012; Elkjær, 2020), or some other trend remains to be tested. Nevertheless, higher levels of account- ability pressure are associated with state governments responding more to public preferences on economic policy as seen in Figure 4.…”

The Rich Have a Slight Edge: Evidence from Comparative Data on Income-Based Inequality in Policy Congruence

“…So, do we find unequal responsiveness elsewhere? Individual country studies from Germany (Elsässer, Hense, and Schäfer 2021); Denmark (Elkjær 2020); the Netherlands (Schakel 2021; Schakel and van der Pas 2020); Norway (Mathisen, 2022); Sweden (Guntermann and Persson 2021; Persson 2021; Persson forthcoming); Spain (Lupu and Tirado Castro, 2022); and EU-level institutions (Lefkofridi and Giger 2020) point to similar patterns of unequal responsiveness. But, as said earlier, this research area lacks cross-country studies that map the terrain in many countries across a range of issues.…”