Falling Apart or Flocking Together? : Financial Crises, Inequality and Left-Right Polarization in the OECD

Abstract

According to the conventional wisdom, political polarization has been growing in the past few decades, and increasing inequality and financial crises have fuelled this trend. Making use of new measures and differentiating between parliamentary and electoral polarization across the left-right cleavage, this article offers a comparative evaluation of this claim for the OECD countries. The results show that the electorates in the European Union have become more conflictive, while the political parties represented in the national parliaments have moved in opposite direction. The statistical analysis demonstrates in line with the theoretical expectations that currency crises have increased mass polarization. The article also offers some tentative support for the hypothesis that increased levels of income inequality enhance this trend and that growing elite discord increases the left-right confrontation in the electorate.