Waseda Institute for Advanced Study (WIAS)早稲田大学 高等研究所


Why does high income inequality not lead to greater demands for redistribution in many democracies?
LEE Yeon Ju, Assistant Professor

LEE Yeon Ju, Assistant Professor

Why does high income inequality not lead to greater demands for redistribution in many democracies?

Focus on Inequality

My research examines the political origins and consequences of economic inequality in comparative perspective. I am interested in studying the mechanisms of how economic inequality affects political attitudes and behavior, at both the individual and national levels. In my current research, I focus on how a sense of injustice and how people perceive economic inequality affects preferences for redistribution. I also try to get at the historical origins of these differences, and how they develop in different countries, particularly Japan and Korea.

In the social sciences, there have been numerous studies that explain political effects of economic inequality. But we still know very little about the mechanism of how economic inequality affects these political outcomes such as support for redistribution, voting behavior and so on. I aim to fill this gap by identifying one possible channel of how income inequality shapes support for redistribution.

Puzzle: Inequality and Redistribution

In my current project I try to resolve a puzzle: In a democratic society, at a time of rising income inequality, you might expect increasing demands for redistribution, for example by increasing taxes on the rich, expanding welfare and voting for politicians who advocate redistribution. But in fact, demand does not increase and even declines in many countries. What can account for this?

My theory is that the answer lies in the mismatch between perception of inequality and actual inequality. Since people do not necessarily perceive that income inequality is high even when it actually is, they do not always demand redistribution. When income inequality and perceived inequality decouple, income inequality does not have a meaningful effect on political variables, including redistributive preferences. Demands for redistribution increase with perceived inequality, not with actual inequality. Income inequality becomes politically salient only when people perceive it as high.

I also argue that a sense of injustice makes people perceive income inequality as high. People are more likely to perceive that income differences are large in their country when they believe that income is distributed unjustly, the rich accumulate wealth through unjust means, corruption is widespread, or the rich mistreat the poor or less well-off. People perceive inequality more acutely when they believe the rules apply differently to different people.

Research has shown that in times of rising income inequality, when one might expect rising demand for redistribution, demand actually declines. The reason lies in people’s perceived inequality rather than actual inequality.

To test the theory, I utilize a multitude of original evidence gathered during more than a year of field work in Japan and Korea, including surveys, experiments, interviews, ethnography and comparative historical analysis. While the observational data analysis is useful in showing whether there is a statistically significant relationship between the variables of interest, it may be subject to unaccounted biases. To improve the internal validity of my claim, I use original online experiments with representative samples of the adult populations in Japan and Korea. I use extensive interview data to trace the causal mechanism and to capture the contextual stories that surveys and experiments cannot tell.

Why Japan and Korea?

I selected Japan and Korea because they are not easy cases. The two countries differ both in actual inequality and perceived inequality in a counterintuitive way. This provides a meaningful variation on the key independent variables but also makes them difficult places to test my theory. In terms of actual income inequality, measured by GINI coefficient, Korea has lower income inequality than Japan. However, its perceived inequality is significantly higher than that of Japan. In my ongoing book project, “Judging inequality,” I am delving into these differences in perception over a longer time horizon.

Different countries show different gaps between actual and perceived inequality. These local perceptions have consequences in political and economic policy.

East Asia has been largely neglected in the recent debate on inequality and redistribution in comparative politics and political economy while American and European countries have been the field’s favorite cases. The region is widely known as a homogeneous bloc with low levels of income inequality. By showing and explaining these interesting differences in actual and perceived inequality in Japan and Korea, I hope to draw scholarly attention to East Asia in the debate.

What’s Next?

My next project will continue to explore various pathways of how economic inequality affect political attitudes and behavior. But instead of perceptions of inequality, I will look at whether and how religious beliefs play a role.

Interview and composition: Robert Cameron
In cooperation with: Waseda University Graduate School of Political Science J-School

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