Inequality, Corruption and Democracy in Industrial Democracies

Abstract

Several OECD democracies face serious challenges to the health of their systems of representational government and accountability because of a combination of factors: high and growing inequalities in income and wealth, the ability of elites corruptly to exert undue influence that undermines democratic processes and skews public policy in their favour, and the increasing alienation of a significant class of citizens who feel politically disenfranchised and economically marginalized. The paper examines the links between income inequality, political inequality, corruption and democracy in this group of countries, with a particular focus on the situation in two major democracies – the US and UK. It presents evidence that corruption is an important factor, among others, that may be exacerbating the adverse impact of economic and political inequality on democracy by weakening the accountability and legitimacy of democratic institutions. In 26 of the 34 OECD countries, political parties are seen by the public as a corrupt institution. While there is a danger of exaggerating the role of corruption in undermining democracy, there is equally a danger of ignoring or minimising the role of corruption, both in diagnoses of, and the formulation of policy responses to, the problems of political and economic inequality. There is a risk of pursuing commendable agendas for reducing economic and political inequality while ignoring an issue that is serious enough to derail those agendas. Curbing the role of money in politics should be a key element of an anti-inequality agenda.