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Redistribution and National Identity

- June 30, 2009

What looks to me like one of the most important articles in political science over the last several years is out in the new _American Political Science Review_ under the rather unprepossessing title, “A Model of Social Identity with an Application to Political Economy: Nation, Class and Redistribution” (available “here”:https://journals.cambridge.org/action/displayIssue?jid=PSR&volumeId=103&issueId=02&iid=5832004# for APSA members; ungated earlier version available “here”:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1002186). Moses Shayo briefly lays out a model of identity that borrows insights from both economics and social psychology. What is interesting is that the model’s predictions are (a) starkly counter-intuitive about the relationship between national identity and preferences over redistribution, and (b) appear to be born out by the data.

Most people tend to assume that strong national identity and strong preferences for redistribution go hand-in-hand – the plausible intuition here is that we are more likely to give to our fellow citizens if we identify strongly with them. This intuition (I’ll get back to this in a little bit) underlies a significant chunk of political theory argument about the relationship between the nation-state and redistributive obligations. Shayo’s argument points in a very different direction – he argues that strong national identity goes together with high income inequality and low desire (among working class voters) for redistribution.

Why? The more similar someone is to other members of a group, the more likely she is to identify with the group, and the higher status the group is, the more likely an individual is to identify with it. This suggests that working class voters are _less_ likely to identify with their class in situations of high inequality (being working class is less high status), and this has consequences for voting behaviour. When working class voters identify more strongly with their class, they are likely to push for redistribution (which will favor their class interests). When working class voters identify less with their class (perhaps because that class is ethnically heterogenous), and more with their nation, they are less likely to want redistribution. Furthermore, these mechanisms are partly recursive – lack of redistribution may increased inequality which makes class identification less attractive still for working class voters, or alternatively, exogenous decreases in inequality may make workers more likely to identify with their (now higher status) class rather than with the nation as a whole. Eventually, an equilibrium is reached:

bq. two types of equilibria may emerge. In the first, the members of the lower class (who constitute a majority) identify with their class. Hence, they vote for a relatively high level of redistribution. A high level of redistribution can in turn help strengthen that class identity by endowing it with a higher status. In the second type of equilibrium, members of the lower class tend to think of themselves more as members of the nation as a whole than as members of a low-status part of it. They are thus less concerned with income redistribution and vote for a lower level of redistribution than they would under class identity. Again, low levels of redistribution can in turn help make identification with the lower class less attractive.

This model seems to be born out by the (admittedly low N) data.

bq. in most economically advanced democracies, national identification reduces support for redistribution. This effect appears to be very large when compared to the effect of economic self-interest. … the model implies that regardless of whether differences in redistributive systems arise from exogenous factors or from multiple equilibria, we should observe a negative relationship between the prevalence of national identification and the extent of income redistribution. A cross-country analysis reveals a very strong negative relationship between these two variables. Indeed, when looking at well-established democracies, the R2 is between 60% and 72 %.

The key graph is here:

shayo.jpg

Shayo here graphs the percentage of income gained by the lowest quintile of the population via redistribution against a six item national identity scale for advanced industrialized democracies. The negative relationship is striking – the more people identify with their country, the less redistribution is likely to occur, and vice-versa (the relationship is fuzzier when less established democracies are included in the data set, but still looks to be there.

If this all holds up (and I note that this is not a debate that I am directly involved in), it has a number of interesting implications. Here’s one. Some left-leaning political theorists such as David Miller (see his “On Nationality”:http://books.google.com/books?id=naLMTURfICAC&dq=david+miller+on+nationality&printsec=frontcover&source=bn&hl=en&ei=pUVKSubiE4eyNsLK6aIB&sa=X&oi=book_result&ct=result&resnum=4 ) have sought to reconstruct social democracy around the model of the nation state, arguing that in the absence of other solidaristic identities, nationalism is the most likely way to generate mass support for e.g. welfare states. If Shayo is right, then Miller is wrong on this – the more nationalism, the less solidaristic redistribution we are likely to see (perhaps Miller might rescue his position by arguing that he wants to see a more civic nationalism which is distinct from the kind of nationalism picked up in opinion polls – but this still looks like a quite damaging finding to me). And there are plenty more suggestive lines of argument like this – I imagine that this piece is going to spur a lot of debate.