The Wealth Effect

Chwieroth, Jeffrey M.; Walter, Andrew

doi:10.1017/9781316649992

Cited by 61 publications

(5 citation statements)

References 314 publications

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“…The financialization of the American economy (Krippner, 2005) has the capacity to lead members of the voting public -many of whose retirement plans are tied up in stock market investments -to have preferences that are not wildly dissimilar from those of banking institutions (cf. Chwieroth and Walter, 2019). Indeed, in a recent article Pagliari et al (2018) find that individual financial asset ownership makes Americans more likely to oppose more stringent financial sector regulation and to favor bank bailouts, consistent with the financialization hypothesis.…”

Section: Public Opinion and Business Powermentioning

confidence: 77%

The art of the shitty deal: media frames and public opinion on financial regulation in the United States

Culpepper

Lee

2020

Socio-Economic Review

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The Dodd–Frank Act of 2010 is the most comprehensive reform of American finance since the Great Depression and an ideal case to study how public opinion can counter the political power of finance. This article shows how pivotal congressional hearings created a clear story line for American media, one built around the way in which the investment bank Goldman Sachs made money during the crisis. We demonstrate that Goldman and CEO Lloyd Blankfein became the face of finance during these hearings. Results from a 2016 online survey experiment enable us to examine whether media portrayals highlighting the personal attributes of Blankfein and Goldman’s deal-making activate public opinion differently than articles foregrounding conflict of interest regulation and Goldman. Compared to the control condition, focus on Blankfein as the face of banking triggers negative affective response, greater appetite for regulating markets and greater attribution of blame toward banks for the financial crisis.

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Section: Public Opinion and Business Powermentioning

confidence: 77%

The art of the shitty deal: media frames and public opinion on financial regulation in the United States

Culpepper

Lee

2020

Socio-Economic Review

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“…This manifests itself in the increasingly skewed income distribution in many countries, but also in the growing role of wealth in structuring economic interests and political preferences. Financialization has ushered in a new politics of wealth, ownership and debt that has shaped political preferences for redistribution in ways quite different to standard accounts of class conflict based on occupation [67,68,69]. In particular, wealth inequality is much higher than income inequality, with most assets concentrated at the very top of the income distribution [46].…”

Section: Death and Taxes: The Decline Of Labour And The Exit Of The W...mentioning

confidence: 99%

The Politics of Tax Justice in Democracies: Redistribution Beyond the Median Voter Theorem

Hopkin¹

2022

LSE Public Policy Review

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Democratic states tend to raise large shares of national income through taxes, and spend the money in ways which redistribute resources from higher to lower income groups. This connection between democratic politics and taxes is a commonplace of the political economy scholarship, but there is much less clarity about the mechanisms through which this redistribution occurs, and the reasons for variations in the degree to which the objectives of social justice are achieved. Democracy can coexist with quite large differences in overall income inequality, and these differences are often driven by institutional legacies that find their roots in the past. The scope for the usual tools of democratic governance -elections and political party programmes -to alter these paths are more limited than is often understood. The contemporary politics of taxation appears to offer very constrained choices to policymakers, but the aspirations of voters for redistribution through the tax system remain a fundamental feature of political competition and conflict in the rich democracies.

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“…However, Pepinsky also highlighted that Malaysia, whose economy had substantial procapital constituencies (with a stock market at 227% gross domestic product [GDP]), was able to impose capital controls precisely because those interests were not represented in government. This is notable because Chwieroth and Walter (2019) argue that the size of the stock market predicts larger bailout constituencies, which similarly implies that the anticapital control constituency in Malaysia should have been quite substantial. Consequently, we see that Malaysia adjusted precisely by being able to push adjustment costs onto the outside group in ways that democracies would have found very challenging.…”

Section: The Influence Of Financial Vulnerabilitymentioning

confidence: 99%

The democratic (dis)advantage: The conditional impact of democracy on credit risk and sovereign default

Hansen

2022

Economics & Politics

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Many have argued that democracies are able to make credible commitments to repay their debts and consequently enjoy higher sovereign credit ratings. In contrast to this expectation, I argue that the advantage of democracies in credit ratings is conditional on the countries' level of financial vulnerability and adjustment needs. Because democracies have more diffuse decision‐making and are more accountable to the public, they encounter greater difficulty than autocracies in passing unpopular economic adjustment measures. Thus, I argue that democracies with high debt levels and low foreign reserve assets experience worse credit outcomes, whereas democracies with low vulnerability experience more positive outcomes. In a sample of up to 96 developing countries, I show that democracies have worse credit ratings and CDS Spreads and are more likely to default than their autocratic counterparts when foreign reserves are low relative to external debt. Notably, I also show that large debt burdens increase credit risk mainly in more democratic countries. I further test the causal pathway of the democratic advantage by constructing democracy scores of “market‐friendly” and “adjustment‐difficulty” democracy, finding that democracy worsens debt outcomes due to adjustment difficulty. These findings help to revise and clarify the causal logic surrounding the democratic advantage hypothesis.

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The Wealth Effect

Cited by 61 publications

References 314 publications

The art of the shitty deal: media frames and public opinion on financial regulation in the United States

The art of the shitty deal: media frames and public opinion on financial regulation in the United States

The Politics of Tax Justice in Democracies: Redistribution Beyond the Median Voter Theorem

The democratic (dis)advantage: The conditional impact of democracy on credit risk and sovereign default

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