Economic Elites in the Driver’s Seat

When we talk about the American political system and, in general, governments that are considered democratic, there is often an elephant in the room: money in politics. We consider democratic governments to be legitimate because we believe that their decisions represent the will of the people. But how much actual “will of the people” is behind government’s decisions? Who really rules?

A recent article by Martin Gilens and Benjamin Page examines four theoretical traditions that answer this question. The first, Majoritarian Electoral Democracy, states that policy changes come from the collective will of average citizens. Here exists not only Lincoln’s version of government—“of the people, by the people, for the people”—but also more contemporary rational choice theories that, for instance, defend the median voter theorem.

The second tradition focuses not on Average Joes but on Warren Buffets. According to what the authors call Economic Elite Domination, individuals who have substantial economic resources dominate policymaking. It is important to note that this does not refer to any kind of elites but exclusively to economic elites.

Interest groups play the leading role in the other two traditions. In the third tradition, called Majoritarian Pluralism, interest groups effectively represent average citizens’ preferences. The fourth tradition, Biased Pluralism, states in a more skeptical tone that interest groups, such as corporations, business associations, and professional groups, are the ones that drive policy change.

All of these traditions have empirical evidence to support their statements. However, this evidence has always been bivariate, showing the relationship between a leading actor and policy changes but not controlling for the role that other actors might play. This new study is a major leap forward. Based on a new dataset of 1,779 policy instances between 1981 and 2002, Gilens and Page examine these four traditions simultaneously.

The model is simple. The dependent variable is whether or not a policy change was adopted within a timeframe. The independent variables represent each of the four theoretical traditions. For measuring the Majoritarian Electoral Tradition and the Economic Elite Domination approaches, Gilens and Page use income breakdowns (50^th percentile and 90^th percentile, respectively). For the interest-group traditions, however, they build a Net Interest Group Alignment index based on an adjusted version of Fortune Magazine’s Power 25 lists. First, they analyze the influence of each actor on policy changes separately and then subsequently analyze them simultaneously.

The results are overwhelming. When analyzed separately, all of the actors are influential, lending credence to all of the traditions. However, when analyzed simultaneously, the estimated impact of average citizens’ preferences “drops precipitously, to a non-significant, near-zero level.” By contrast, economic elites and organized interest groups, especially business-oriented interested groups, are estimated to have a substantial, highly significant, independent impact on policy.

This doesn’t mean that ordinary citizens always lose out but that their support will not be enough: when a majority of citizens disagrees with economic elites or with organized interests, the majority generally loses. In the US, the majority does not rule; rich people do.

Some questions emerge. Is this a trend in all policy areas, or does it depend on the specific policy issue? What would the data from 2002 through 2014 show? These and other questions may arise; nonetheless, the article is enlightening. It brings new evidence that backs a long-time suspicion and opens the door for key questions: what would happen if we replicated this methodology in other countries, say Colombia or Kenya? What are the institutional mechanisms that foster economic elitism’s power? If we’re sticking with democracy, what kind of reforms should be adopted, in the United States and in other countries, to make institutions less responsive to elites and more responsive to majorities and underprivileged minorities?

Article Source: Martin Gilens and Benjamin Page. 2014. “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens”. Perspectives on Politics, 12 (3): 564-581.

Feature Photo: cc/(jenniembrady)