Extreme Inequality and the Structure of Political Cleavages in South Africa
WID.world Working Paper 2020/13, July 2020
This paper draws on political attitudes surveys to study the interplay of social inequalities and racial cleavages in South Africa since 1994. I analyze the link between voting behaviors and the main characteristics of voters, in particular income, education level, wealth, race, and their interactions. I document extreme socioeconomic political divides, which are strongly, though not entirely explained by South Africa’s exceptional racial inequalities. The gradual decline of the dominant African National Congress since 1994 has been driven by the shift of the new Black middle class towards opposition parties. Growing abstention among the youth and the lower-educated has further eroded support for the ANC.
Estimating the Distribution of Household Wealth in South Africa
WID.world Working Paper 2020/6 - UNU-WIDER Working Paper 2020/45, April 2020
with Aroop Chatterjee and Léo Czajka
This paper estimates the distribution of personal wealth in South Africa by combining tax microdata covering the universe of income tax returns, household surveys and macroeconomic balance sheets statistics. We document major inconsistencies between available data sources, in particular regarding the measurement of dividends, corporate assets and wealth held through trusts. Notwithstanding a significant degree of uncertainty, our findings reveal unparalleled levels of wealth concentration. The top 10 per cent own 86 per cent of aggregate wealth and the top 0.1 per cent close to one third. The top 0.01 per cent of the distribution (3,500 individuals) concentrate 15 per cent of household net worth, more than the bottom 90 per cent as a whole. Our series show no sign of decreasing wealth inequality since apartheid: if anything, we find that inequality has remained broadly stable and has even slightly increased within top wealth groups.
Media coverage: Groundup.
WID.world Working Paper 2020/19, September 2020
with Thomas Blanchet and Lucas Chancel
This paper combines all available household surveys, income tax and national accounts data in a systematic manner to produce comparable pretax and posttax income inequality series in 38 European countries between 1980 and 2017. We find that inequalities rose in most European countries since 1980 both before and after taxes, but much less than in the US. Between 1980 and 2017, the European top 1% pretax income share rose from 8% to 11% while it rose from 11% to 21% in the US. Europe’s lower inequality levels are mainly explained by a more equal distribution of pretax incomes rather than by more equalizing taxes and transfers systems. “Predistribution” is found to play a much larger role in explaining Europe’s relative resistance to inequality than “redistribution”: it accounts for between two-thirds and ninety percent of the current inequality gap between the two regions.
Growing Cleavages in India? Evidence from the Changing Structure of Electorates
Economic and Political Weekly, 54(11), pp. 34-44, March 2019
with Abhijit Banerjee and Thomas Piketty
This paper combines surveys, election results and social spending data to document a long-run evolution of political cleavages in India. The transition from a dominant-party system to a fragmented system characterised by several smaller regionalist parties and, more recently, the Bharatiya Janata Party, coincides with the rise of religious divisions and the persistence of strong caste-based cleavages, while education, income and occupation play a diminishing role (controlling for caste) in determining voters’ choices. More importantly, there is no evidence of the new party system being associated with changes in social policy, which corroborates the fact that in India, as in many Western democracies, political conflicts are increasingly focused on identity and religious–ethnic conflicts rather than on tangible material benefits and class-based redistribution.
Media coverage: Economic Times
Thailand is finally set to have a general election on 24 March 2019 after five years of military government and a long period of political uncertainty. In this note, we argue that a main source of political instability is brought by Thailand’s extreme levels of income, wealth and regional inequalities, as well as by the rising politicisation of class conflicts around redistributive issues which followed the Asian Financial Crisis. The post-1997 party politics successfully put an end to a long period of rising income disparities, but Thailand remains one of the most unequal societies in the world today. Most importantly, class cleavages can be seen in voting behaviours and party identification, but not so in terms of preference for democracy and political ideologies.
Media coverage: Bangkok Post.
WID.world Issue Brief 2018/3
with Marc Morgan
The political polarisation surrounding the 2018 Brazilian presidential election can be associated to class cleavages linked to the Workers’ Party’s policies in directly improving the living conditions of the poor, and indirectly benefiting elites, largely to the neglect of the middle class. The poorest 50% in the income distribution have been increasingly more likely to vote for the PT and other left-of-centre parties since 2002 compared to the richest 10%. This striking evolution occurred in a context of strong income growth for the bottom deciles (almost twice the national average), compared to the lower-than average growth for the upper-middle class. The Bolsonaro vote has gathered those who are disappointed with the political system’s corruption and complacency for security issues, as well as those who are appeased by the candidate’s liberal economic program.