Democracy has been under siege in many countries. A new study from the University of Chicago sheds light on a key factor behind this troubling trend: economic inequality. The findings suggest that even wealthy, long-established democracies can fall apart when inequality runs too high.
The study explores why, in the early 21st century, dozens of nations have seen elected leaders undermine democratic norms. Globalization and deregulation—cornerstones of the neoliberal policies of recent decades—have widened income gaps. This growing inequality has fueled public frustration and mistrust of political institutions, creating fertile ground for leaders who exploit grievances.
Increasing polarization
The link between inequality and democratic backsliding works through polarization. Researchers used data from the V-Dem Institute, which tracks democracy around the world, to compare countries where democracy has faltered to those that have stayed on track. They found that nations with high inequality were far more likely to experience political polarization, which made citizens more willing to tolerate attacks on the press, courts, and other safeguards of democracy.
Populist leaders on the right and left take advantage of this polarization. Right-wing leaders often target immigrants or minorities, blaming them for economic hardship. Left-wing leaders point fingers at corporations and the wealthy. Both strategies deepen divisions and corrode democratic systems.
The study also debunks a common assumption: older democracies with strong institutions are not necessarily safer from erosion. In fact, when inequality takes hold, even the most stable democracies can slip into decline. Worse, these declines can spread—leaders in one country often inspire imitators elsewhere.
For Americans worried about the state of their democracy, the study offers a sobering reminder: this is not just a domestic problem. The same forces undermining democracy in the U.S. are at work worldwide, rooted in decades of economic policy that prioritized markets over equality.
The lesson is clear. Reducing inequality is not only good for fairness and social cohesion—it’s also essential for protecting democracy itself.
