I Inequality and Redistribution

Determinants of Inequality in Latin America and Eastern Europe: Economic Structure and Domestic Policy Choices (book manuscript)

My book manuscript explores the factors that affect market income inequality in two regions that pursued substantial economic reorganization and integrated into the global economy in a period of intensifying globalization. Combining time-series cross-sectional statistical analysis and extensive fieldwork in Bulgaria, Chile, and Peru, I argue that the different patterns of economic restructuring and specialization in these regions have shaped their income distribution in different ways. Contrary to existing theoretical approaches, which often ignore economic dynamics, I focus on previously neglected structural transformations related to deindustrialization, agricultural modernization, and specialization in the production of commodities. I complement the statistical analysis of these trends with 145 expert interviews with academics, politicians, and policy advisors which explain why governments from different ideological stripes have largely adhered to the neoliberal model in labor market and economic policy. Taking a comprehensive view, bridging several literatures, and focusing on a previously neglected outcome, the book illuminates important dynamics that shed light on the constraints that policymakers face in an increasingly interconnected world.

Redistribution and the Quality of Government: Evidence from Central and Eastern Europe [British Journal of Political Science 2021] (article)

The welfare state literature has largely ignored the impact of a country’s quality of government on its levels of redistribution. Using cross-sectional time-series analysis of twenty one Central and Eastern European countries, I show that environments characterized by higher levels of corruption, rampant bureaucratic inefficiency, and ineffective enforcement of the rule of law are associated with lower levels of redistribution. Poor government directly affects the supply side of the redistribution process by hindering countries’ ability to allocate funds to redistribution and deliver them to their beneficiaries. Contrary to existing demand-oriented perspectives, the proposed causal mechanism does not blame lower redistribution on the lack of public support for the welfare state. Rather, it focuses on the capacity of states to adopt and implement inequality-reducing policies. The results are robust to numerous extensions and model specifications.

Globalization, Political Institutions, and Redistribution in Central and Eastern Europe (with Aleksandra Sznajder Lee) [Comparative Political Studies 2023] (article)

We examine the role of political institutions in mediating the effects of globalization on economic redistribution in Central and Eastern Europe. The region represents a least-likely case of welfare state resilience in the face of global economic pressures given its reliance on foreign capital and considerable domestic elite support for neoliberal recipes during the postcommunist transition. Yet, contrary to the race-to-the-bottom hypothesis and consistent with the compensation perspective, we find that economic openness is on average related to higher redistribution. Using the high-quality European Union Statistics on Income and Living Conditions database for 2004–2018, we find that this effect is particularly pronounced in institutional environments where votes are more accurately translated into legislative seats (low disproportionality) and where governments face greater scrutiny both during elections (vertical accountability) and between them (diagonal accountability). Thus, even in a region that adopted “competitive deregulation,” the downward pressures of globalization were limited by electoral pressures for economic redistribution.

The effect of European integration on economic redistribution in Central and Eastern Europe [European Union Politics 2023] (article)

We examine the effects of European integration on economic redistribution in Central and Eastern Europe. While accession to the European Union provided new economic opportunities, it also imposed considerable constraints. Using cross-sectional time-series analysis of 11 post-communist countries between 2004 and 2018, we focus on the impact of trade flows, cohesion policy funds, emigration, remittances, and Economic and Monetary Union membership. We find that emigration and commercial reorientation toward the European Union are associated with greater efforts to alleviate income inequality. In contrast, the adoption of the euro induces lower redistribution. Finally, the receipt of European Union cohesion funds does not affect income differentials. To our knowledge, this is one of the first systematic analyses of how the European Union shapes inequality dynamics in Central and Eastern Europe.

Determinants of Income Composition Inequality (with Marco Ranaldi) [Comparative Politics 2024] (Petrova Ranaldi 2023) [Petrova Ranaldi Appendix]

A rich literature examines the determinants of income inequality. Less is known about the distribution of income composition, or the extent to which different socio-economic groups hold different sources of income. This paper explores the drivers of income composition inequality (ICI). Contrary to recent studies, which show that the composition of government has ceased to shape redistribution and income inequality dynamics, this paper posits that left-wing parties are associated with lower income composition inequality. We test this expectation with data from 30 European countries between 2003 and 2017. Our results suggest that the polarization between capital and labor income holders declines under left-wing governments. We establish that this is mainly because left-wing parties seek to broaden access to capital income.

II Financialization

The Global Deregulation Hypothesis (with Thomas Oatley) [Socio-Economic Review 2022] (article)

The growth of the American financial services remains a bit of a puzzle. The standard approach, the deregulation hypothesis, posits that the industry expanded in response to national deregulation. Yet, when viewed in a comparative context, US finance was deregulated significantly less than other national financial systems and yet grew significantly more than most. We propose the global deregulation hypothesis as a solution to this puzzle. The hypothesis posits that American finance grew in response to deregulation in Europe and the emerging market economies. The article develops two theoretical mechanisms that link global deregulation to US financialization. It reports statistical tests that support two central implications of the global deregulation hypothesis. First, global deregulation is positively associated with the growth of US financial services, while US deregulation is not. Second, global deregulation is not systematically related to the growth of financial services in other industrial democracies.

Financialization, Labor Market Institutions, and Inequality (with Evelyne Huber and John D. Stephens) [Review of International Political Economy 2020] (article)

The last three decades have witnessed rising inequality and deepening financialization in post-industrial democracies. A rapidly growing literature has linked these two phenomena. We go beyond existing scholarship by specifying which aspects of financialization can be expected to increase inequality and where in the income distribution this effect will occur. We also show that this effect is contingent on institutional context. We posit that the shareholder model of corporate governance and the growing demand for financial professionals are the two dimensions of financialization that drive up pre-tax income inequality. Nevertheless, the spread of the shareholder value model only benefits the very top income earners. We further argue that the institutional strength of labor shapes the relationship between financialization and inequality. We analyze effects of indicators of these two dimensions of financialization on the top 1% and the next 9% income shares and on the 90:50 earnings ratio. We test our hypotheses with data on 18 post-industrial democracies between 1960 and 2015.

III Democratic Support

Authoritarian or Simply Disillusioned? Explaining Democratic Skepticism in Central and Eastern Europe (with Kiran Auerbach) [Political Behavior 2022] (article)

Survey research has revealed that post-communist citizens are skeptical towards democracy. Despite a substantial body of literature that has researched the origins and determinants of these attitudes, consensus has not yet emerged. A major challenge has been to distinguish between individual support for democracy as an ideal political regime and satisfaction with the way democracy is practiced in one’s country. Using structural equation modeling with latent variables, we improve measurement validity and account for feedback effects to better understand the relationship between these attitudes. Consistent with our performance-based theory, we find that positive assessments of political performance drive normative support for democracy. The impact of satisfaction with democracy on democratic support suggests that we should not rush to view post-communist citizens’ mindset as anomalous and inherently anti-democratic. Rather, post-communist skepticism of democracy might be generalized to contexts characterized by flawed implementation and unmet expectations of this form of government.

IV Preferences for Government Intervention in Socio-Economic Life

Quality of Government Perceptions and Preferences for Economic Redistribution (QoG working paper)

This project examines the impact of perceptions about the quality of government on support for state-sponsored redistribution. While existing scholarship has identified a number of factors that shape welfare state attitudes, individual evaluations of institutional quality have received relatively little attention. I seek to address this gap by studying the way in which exposure to information about corruption and institutional inefficiency affects views on the role of the state in alleviating socio-economic inequality. To do this, I rely on two empirical strategies. I begin by leveraging a natural experiment in Denmark where a public servant was arrested for corruption and embezzlement of especially large proportions. I proceed to run an original priming experiment in the United Kingdom. Drawing on an audit report by the Department of Work and Pensions, I inform participants of the amount of fund misallocation within the Universal Credit system and ask them about their support for different welfare, social investment, and market intervention policies. This multi-stage empirical approach allows me to explore whether perceptions about corruption and institutional quality are correlated with welfare state attitudes and how respondents’ support for state-sponsored redistribution changes in response to their being primed to think about the quality of the institutional apparatus and the cleanliness of the bureaucratic service in their country.