The impact of constitutional structures and collective and competitive veto points on income inequality in industrialized democracies

Abstract

Abstract This paper presents the first systematic, empirical examination of the impact of constitutional structures on income inequality among eighteen OECD countries. Our pooled time series/cross–sectional panel analysis (n = 18, t = 2) reveals that consensual political institutions are systematically related to lower income inequalities while the reverse is true for majoritarian political institutions. We also make a crucial distinction between ‘collective’ and ‘competitive’ veto points. Our multiple regression results provide strong evidence that collective veto points depress income inequalities while competitive veto points tend to widen the inequality of incomes. Thus, some institutional veto points have constraining effects on policy while others have ‘enabling’ effects.