Divided we fail: economic inequality, social mistrust, and political instability in Latin American democracies

Abstract

Although it is well-established, at least since Aristotle, that high levels of economic inequality produce political instability, the underlying mechanism by which this link works has been largely underspecified. By placing ordinary citizens at the center of the causal chain, my dissertation seeks to explore theoretically and empirically the “black box” of how economic inequality erodes stable democracy. The main argument of this study is that through the erosion of a core democratic attitude, generalized interpersonal trust, the high levels of economic inequality that characterize most democracies in the developing world make political conflict over redistributive policies between the rich and poor more likely, putting democratic stability at risk. This research is able to identify a vicious circle in economically underdeveloped democracies that ties together high economic inequality, low interpersonal trust, and low support for redistributive policies within certain segments of the population, especially among the wealthy. This study tests these propositions in the Latin American context, a region long characterized by high levels of economic inequality and unstable political regimes. Methodologically, unlike prior works, this study simultaneously takes into account the characteristics of both the economic structure and citizens. In particular, it implements a multilevel strategy using an innovative approach, looking both cross-nationally and sub-nationally for patterns to support the theory. The findings of my dissertation suggest that patterns of discrimination against the poor and fear of crime, especially among the wealthy, are primarily present in highly economically unequal and underdeveloped societies. In turn, such undesirable social attitudes translate into social mistrust. Low levels of interpersonal trust under such environments lead to lower support for public policies aimed at shrinking the gap between the rich and poor, particularly among prosperous individuals, largely explaining why political instability reigns in highly unequal democracies. In sum, the empirical evidence of this dissertation gives support to the claim that Latin American countries are at the midst of a vicious circle that is impeding to fight poverty and deepening democracy.