Three essays on economic and political inequality in the United States

Parmigiani, Alberto (2023) Three essays on economic and political inequality in the United States. PhD thesis, London School of Economics and Political Science.

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Abstract

This thesis, structured in three articles, studies the interplay between economic inequality and political influence in the United States in the last four decades. By making use of campaign contributions as a proxy for political influence, the dissertation analyses the impact of rising income inequality on public policy decision. In the introduction, I discuss the relationship between the level of economic disparities and political inequality in advanced contemporary democracies and I describe in detail the system of finance of politics in the United States. The first article of the thesis analyses the concentration of campaign contributions to members of Congress in relation to their legislative behaviour. It argues that a skewed structure of political funds makes legislators more dependent from a relatively smaller number of donors, and thus less committed in representing their constituencies. In this sense, I find that legislators with a more concentrated distribution of donations are less active in sponsoring bills, delivering speeches and appearing before committees. The second article studies the effect of the 1986 Tax Reform Act on political donations. This policy involved a large cut in marginal tax rates which was disproportionately higher for richest income owners, thus increasing income inequality. I show that this landmark reform of the second Reagan administration caused an increase of contributions from the top ten percent of income owners. I conclude that the erosion of tax progressivity through this regressive tax policy, by reshaping the donor pool towards the right tail of the income distribution, has represented a crucial step in the spiral between economic inequality and uneven political influence of the last four decades. In the third paper, I use voter registration and individual campaign contributions data to study the rising ideological polarization of donors in the United States. By tracking the party affiliation of registered voters over time in a selected sample of states, I build a time-varying measure of ideology for donors. In this way, I document the rise in the ideological polarization of a very politically active part of public opinion.

Item Type:	Thesis (PhD)
Additional Information:	© 2023 Alberto Parmigiani
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions J Political Science > JK Political institutions (United States)
Sets:	Departments > Government
Supervisor:	Larcinese, Valentino and Emeriau, Mathilde
URI:	http://etheses.lse.ac.uk/id/eprint/4509

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