How democracy is influenced by the wealthy across the world?

Context: The research paper by Ruben B Mathisen compares the influence of the affluent on policy-making in Norway and the United States. The clear result of the study is that in a social democracy like Norway, the link between money and politics was much weaker than in the U.S.

A comparison of the democracy of Norway and the U.S

Comparison FactorsNorwayUnited States
Policy-making processTargeted schemes: ‘Targeted schemes’ like the ones we have in India which only benefit the so-called ‘needy’ and tend to provoke resentment among the ‘non-needy’ about how their tax money is being frittered away in ‘freebies’.Public policy decidedly favoured the preferences of the affluent, at the expense of the poor and the middle classes
Economic inequalityLow levels of income inequalityHigh levels of income inequality
Universal welfare schemes‘Universal’ welfare measures: ones that benefit every citizen such as free education and free public healthcare. universality of social benefits has the effect of ensuring their legitimacy and endorsement across classes, including the affluent.‘Universal’ welfare measures: ones that benefit every citizen such as free education and free public healthcare. the universality of social benefits has the effect of ensuring their legitimacy and endorsement across classes, including the affluent.
Wealth redistributionNorway has one of the lowest levels of income inequality in the world, which essentially means “less of a resource advantage for the affluent to be used (in whichever way possible) to influence politicsLow levels of wealth redistribution
Political party fundingParties get two-thirds of their financing from state subsidies and political advertising on television is bannedHistorically strong trade unions have been able to influence economic and social policy
Political advertising on television is banned in Norway, making the entire campaign process less vulnerable to private wealthTelevision advertising is a huge campaign expense in American elections
Trade unionsTrade unions are no longer as politically powerful as they once wereTrade unions are no longer politically powerful as they once were
Energy reservesVast reserves of oil and natural gas have made it possible for the government to maintain generous welfare transfers while imposing lower tax ratesNo such significant reserves of natural resources
Wealth of politicians The country’s political class is not particularly wealthy. The median wealth among Norwegian MPs is zero, according to tax records, which means that it is unlikely for policies to be biased in favour of the rich just because the politicians are themselves rich. There are laws requiring proportionate representation of women in government institutions. Since women on average have lower incomes than men, their higher levels of representation resulted in greater political influence for women, which, in turn, got translated into greater political influence for lower-income citizens.
Gender inclusiveness There are laws requiring proportionate representation of women in government institutions. Since women on average have lower income than men, their higher levels of representation resulted in greater political influence for women, which, in turn, got translated into greater political influence for lower-income citizens.No such institutional mechanism to engender the governance process. 

The Norway example demonstrated two things

  • one, in a welfarist social democracy with low inequality, education was a stronger predictor of responsiveness than income; 
  • and two, restricting how money can be used to influence elections, and strengthening countervailing forces (such as trade unions) might change the balance of power. 

The authors however remark, that initiating such changes would be most difficult in precisely those democracies that need them the most, because it is in those countries that the affluent already wield the greatest influence on policy.

Learnings for a constitutional democracy all over the world based on the above study

  • Strong social welfare programs can lead to greater social equality and a higher standard of living for citizens.
  • A decentralized political system with strong state-level autonomy can lead to greater responsiveness to local needs and concerns.
  • A robust system of checks and balances between the executive, legislative, and judicial branches of government can prevent the concentration of power in any one branch.
  • A high degree of political transparency and accountability can help to maintain public trust in government institutions.
  • Political polarization and a lack of willingness to compromise can impede progress on important policy issues.
  • A commitment to protecting individual rights, such as freedom of speech and the press, is essential for a healthy democracy.
  • Economic policies that prioritize the interests of corporations and the wealthy can exacerbate inequality and undermine democratic values.
  • The presence of a strong civil society, including active NGOs and citizen advocacy groups, can help to hold politicians accountable and ensure that the needs of all citizens are represented.
  • A well-functioning electoral system, including fair and accessible voting procedures, can help to ensure that the voices of all citizens are heard.
  • A culture of civic engagement and political participation can strengthen democracy and promote a more informed and engaged citizenry.

Mains practice question

What are the key factors that contribute to the stability and success of constitutional democracy. How can countries ensure the preservation of democratic values and institutions in the face of challenges such as populism, polarization, authoritarianism and the influence of the rich? (250 words 15 Marks)

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