The rich are running Latin America – and why that matters

April 8

Panamanian President Ricardo Martinelli – speaking during a press conference in Mexico City, on March 24, 2014 – owns the country’s biggest supermarket chain and is one of the wealthiest leaders in Latin America. (EPA/Mario Guzmán)

Joshua Tucker: The following is a guest post from political scientists Noam Lupu (University of Wisconsin) and Nicholas Carnes (Duke University).

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The last presidential election in Mexico was fought between two affluent career politicians and a millionaire businesswoman.  Last year’s race in Chile pit an economist against a physician.  And the three frontrunners in Brazil’s presidential election this year are all millionaire economists.

If you’re starting to see a pattern here, you’re not alone. Latin American democracies—like democracies all over the world—are disproportionately run by the rich.  Although working-class jobs (manual labor and service industry jobs) make up the vast majority of the labor force in every Latin American country, only a tiny percentage of Latin American lawmakers come from those kinds of backgrounds. Like most places, Latin America is run by white-collar governments.

Many journalist, scholars, and political observers take this aspect of the governing environment for granted in Latin America and elsewhere.  Commentators in Chile last year buzzed about two female presidential contenders, but rarely noted that both came from affluent backgrounds.  Perhaps they’re so accustomed to well-off politicians that they just see them as a natural feature of the political landscape.  Or perhaps they believe that it doesn’t matter whether politicians are drawn from one class or another.

In a forthcoming article in the American Journal of Political Science, we show that the shortage of politicians from the working class in Latin American democracies has serious consequences for the economic policies they produce.  Legislators from different classes bring very different economic perspectives to public office, and as a result, they often make different kinds of choices about economic policy. Government by the rich is not an irrelevant quirk of the political landscape. Latin America’s plutocracy has real consequences for who wins and who loses in the region’s politics.

Like most advanced and developing countries (including the U.S.), the majority of the labor force in Latin American countries is working class. The top panel of the figure below plots data from the International Labour Organization on the occupational breakdowns of 18 Latin American countries in the early 2000s. The dark grey bars on the far left represent the percentage of citizens in what we might think of as blue-collar jobs. In less developed countries like Bolivia and Honduras, the working class makes up close to 90 percent of the economy. Even in the more developed countries in the region, like Argentina, more than two out of every three citizens have working-class jobs. On average, roughly 80 percent of Latin American citizens are workers.

Class distributions in Latin American legislatures (Data: University of Salamanca survey of Latin American legislators and International Labour Organization statistics on population occupations; Figure: Noam Lupu and Nick Carnes/The Monkey Cage)
Class distributions in Latin American legislatures (Data: University of Salamanca survey of Latin American legislators and International Labour Organization statistics on population occupations; Figure: Noam Lupu and Nicholas Carnes/The Monkey Cage)
Class distributions in Latin American populations (Data: University of Salamanca survey of Latin American legislators and International Labour Organization statistics on population occupations; Figure: Noam Lupu and Nick Carnes/The Monkey Cage)
Class distributions in Latin American populations (Data: University of Salamanca survey of Latin American legislators and International Labour Organization statistics on population occupations; Figure: Noam Lupu and Nicholas Carnes/The Monkey Cage)

In sharp contrast, people from the working class make up just 10 percent of the average Latin American legislature. As the bottom panel of the figure illustrates, in all of the 18 major democracies in the region, there is at least a 60-point gap between the percentage of citizens employed in working-class jobs and the percentage of legislators drawn from the working class. Workers are the backbone of Latin American economies, but in democratic politics throughout the region, they rarely have a seat at the table.

Our research suggests that these inequalities in who governs in Latin America have serious consequences for economic policy. For one, legislators from different classes tend to bring different perspectives to the legislative process. The figure below plots survey responses from over 1,500 legislators in the 18 major Latin American democracies. The survey—conducted by the University of Salamanca in the early 2000s—asked a series of simple but probing questions about lawmakers’ personal views on several forms of government social spending: unemployment, public housing, health and social security, education, public safety, pensions, and infrastructure. The social class divisions in lawmakers’ responses are crystal clear.  The figure plots the percentage of the seven social spending programs that legislators felt should receive the same or lower spending (dividing legislators by occupation). Legislators who scored higher on this measure personally favored lower government intervention in the economy (more conservative policies), and legislators who scored lower favored more economic intervention (more progressive).  The class-based divisions in Latin American legislators’ attitudes are easy to see.  Lawmakers from various white-collar professions tend to have more conservative views, whereas lawmakers from the working class tend to hold more progressive attitudes.

Class and economic Attitudes in Latin American Legislatures (Data: University of Salamanca survey of Latin American legislators; Figure: Noam Lupu and Nicholas Carnes)
Class and economic Attitudes in Latin American Legislatures (Data: University of Salamanca survey of Latin American legislators; Figure: Noam Lupu and Nicholas Carnes)

And these different perspectives often translate into differences in how legislators behave in office. Of course, legislators face a wide range of external pressures that mute the influence of their own views: parties, constituents, interest groups, social movements, and so on. When legislators make closely-watched decisions like casting roll-call votes, their hands are often tied. But behind the scenes, legislators from different classes often behave differently.

The figure below illustrates this point with data from Argentina in the early 2000s, when Argentine parties were among the most disciplined in Latin America. The first set of bars graphs the differences in the attitudes about government spending Argentine legislators reported on the Salamanca survey. The second set of bars graphs the percentage of the economic bills they sponsored (a common measure of agenda-setting activity) that would increase or decrease spending on the same set of economic programs. And the third set of bars plots a standard composite measure of how Argentine legislators voted on economic issues. In all three sets of bars, we divided legislators into profit-oriented white-collar jobs (business owners and technical professionals), other white-collar jobs (lawyers, career politicians, military/law enforcement, and service-based professionals), and blue-collar jobs (manual laborers and service industry workers). And in all three, we account for the legislator’s party affiliation.

This graph illustrates the expected difference between legislators who were blue-collar workers and legislators who were white-collar professionals. Legislators from blue-collar jobs are our point of reference--in this graph, they are represented with values of 0--and this graph plots how much more leftist or rightist legislators from white-collar jobs were (according to statistical models that also controlled for political party) in terms of their own attitudes, the kinds of bills they cosponsored, and how they voted. All three variables are scaled to range between 0 and 100, so the estimates in this figure can be interpreted as the average difference on a 0 to 100 scale between a lawmaker from the working class and lawmakers from different white-collar professions, controlling for party. (Data: University of Salamanca survey of Latin American legislators, Directorio Legislativo survey of Argentine legislators Aleman et al. (2009) estimates of Argentine legislator voting and sponsorship, and authors’ data on Argentine bills; Figure: Noam Lupu and Nicholas Carnes/The Monkey Cage)
This graph illustrates the expected difference between legislators who were blue-collar workers and legislators who were white-collar professionals. Legislators from blue-collar jobs are our point of reference–in this graph, they are represented with values of 0–and this graph plots how much more leftist or rightist legislators from white-collar jobs were (according to statistical models that also controlled for political party) in terms of their own attitudes, the kinds of bills they cosponsored, and how they voted. All three variables are scaled to range between 0 and 100, so the estimates in this figure can be interpreted as the average difference on a 0 to 100 scale between a lawmaker from the working class and lawmakers from different white-collar professions, controlling for party. (Data: University of Salamanca survey of Latin American legislators, Directorio Legislativo survey of Argentine legislators Aleman et al. (2009) estimates of Argentine legislator voting and sponsorship, and authors’ data on Argentine bills; Figure: Noam Lupu and Nicholas Carnes/The Monkey Cage)

Like other Latin American lawmakers, Argentine legislators from different classes tend to see economic issues differently. When they cast their votes they tend not to differ all that much, presumably because parties and other actors are keeping them on a short leash. Yet when they are setting the agenda and fewer people are watching, the differences in their economic priorities are plainly apparent: legislators from the working class tend to introduce substantially more progressive economic bills.  In a typical legislative session, the shortage of Argentine legislators from the working class translates into roughly 50 fewer progressive bills being introduced.  It is impossible to know exactly how these missing bills might have affected economic policies, but we do know that the policy agenda would have looked more progressive.  The fact that legislators come disproportionately from affluent backgrounds biases the economic agenda.

For too long, scholars and political observers have overlooked this bias.  It is time we begin taking it seriously. Governments all over the world are disproportionately run by rich politicians, and that has real consequences for who wins and who loses in democratic politics.

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Other recent posts on The Monkey Cage concerning inequality include:

Kenneth Scheve and David Stasavage: Why hasn’t democracy saved us from inequality?

David Stasavage: Should we care about inequality?  Let’s ask *another* philosopher?

David Williams: Should we care about inequality?  Let’s ask a philosopher.

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