Macrolevel Theory and Local-Level Inequality: Industrial Structure, Institutional Arrangements, and the Political Economy of Redistribution, 1970 and 1990

Abstract

This study assesses the explanatory power of macrolevel political economy theory for redistribution across local areas. We focus on contentions about the role of industrial structure and institutional arrangements in income growth and inequality in two periods, 1970 and 1990. Specific hypotheses are derived from the Social Structures of Accumulation approach. These include (1) that redistribution processes have shifted, with manufacturing employment and institutional arrangements between capital-labor and state-citizens less able to generate local growth and reduce income inequality than in the past, and (2) that effects of manufacturing employment on inequality are partly contingent on local institutional context. These hypotheses are tested for U.S. counties using regression models that conceptualize geographic processes through spatial diffusion effects and nesting of counties within states. Results support most baseline, 1970 relationships suggested by theory. Other findings run counter to political economy claims. They do not support assumptions that progressive institutional arrangements and leading manufacturing industries worked in tandem to reduce inequality. Relationships between inequality and manufacturing employment remain similar in 1970 and 1990, but there is some evidence that the role of institutional arrangements in redistribution may be shifting. On balance, however, local patterns of inequality and their social determinants have changed little despite two decades of Fordist restructuring. The results provide local-level evidence challenging widely held assumptions about a profound break in redistribution relationships relative to the past. They indicate the need to investigate inertia as a social process.