American State Ballot Initiatives and Income Inequality

Joshua J Dyck,Edward L Lascher, Jr,Wesley Hussey

doi:10.17645/pag.v7i2.1873

Abstract

Some have argued that the ballot initiative process prevalent in many American states might lower inequality. We contend this is improbable based on what is known about whether expansion of democracy leads to redistribution, the attitudes of citizens, and the characteristics of the initiative process. Nevertheless, the proposition needs testing. We examine three types of evidence. First, we analyze the content and passage of all post-World War II initiatives going to voters in California, a state that makes heavy use of ballot propositions. Second, we model institutional factors influencing differences in inequality at the state-level from 1976–2014 to test the aggregate-level effect of ballot initiatives on income inequality. Third, we use individual level data to evaluate the claim that frequent initiative use makes lower income people happier because it helps to reduce inequality. Our analyses consistently indicate that the ballot initiative process fails to reduce income inequality.

Highlights

Might direct democracy in the American states be a means for reducing income inequality? Some have hoped this would be the case
We seek to test whether ballot initiatives reduce income inequality in the American states and subject that hypothesis to rigorous empirical testing
We test whether the frequency of ballot initiatives leads to an increase in life satisfaction among individuals with the lowest incomes, those with the most to gain from economic redistribution

Summary

Introduction

Might direct democracy in the American states be a means for reducing income inequality? Some have hoped this would be the case. One recent academic book (Franko & Witko, 2018) argues that in the current era of greater public concern within the American public about growing inequality, the initiative process encourages adoption of redistributive policies. Another recent academic study (Radcliff & Shufeldt, 2016) claims to offer evidence that greater use of ballot initiatives enhances the subjective well-being of lower income citizens. The authors contend this is likely because of redistributive policies under the initiative process. None of the empirical approaches we undertook supported the idea that direct democracy in the American states promotes redistribution and/or works to effectively reduce income inequality

Theory and Expectations

Data, Methods, and Results

Redistributive Ballot Measures in California

Aggregate Analysis of Income Inequality in the States

Conclusion