Isabela Mares

The Non-Democratic Origins of Income Taxation

This article examines the adoption of income taxes in Western economies since the 19th century. We identify two empirical regularities that challenge predictions of existing models of taxation and redistribution: While countries with low levels of electoral enfranchisement and high levels of landholding inequality adopt the income tax first, countries with more extensive electoral rules lag behind in adopting these new forms of taxation. We propose an explanation of income tax adoption that accounts for these empirical regularities. We discuss the most important economic consideration of politicians linked to owners of different factors, namely, the shift of the tax burden between sectors, and examine how preexisting electoral rules affect these political calculations. The article provides both a cross-national test of this argument and a microhistorical test that examines the economic and political determinants of support for the adoption of the income tax in 1842 in Britain.

The Economic Consequences of the Welfare State

What are the economic and employment consequences of larger social insurance programmes? Are larger welfare states diverting resources from economic activity and distorting the investment decisions of firms? I examine theoretical and empirical research on the economic consequences of the welfare state. This review shows that the predictions of a negative relationship between higher levels of social protection and growth have not been borne out in the data. Both insurance programmes and other policies that increase investment in human capital or the overall productivity of workers generate important economic externalities that outweigh the potentially distortionary effects of higher taxes. Empirical studies also fail to uncover a consistent negative relationship between larger welfare states and the level of employment. The employment consequences of the welfare state are mediated by existing institutions and policies - such as the level of centralization of the wage bargaining system - which affect the redistribution of the costs of higher taxes among workers and firms. As a result, the employment consequences of larger welfare states are non-linear.

The Adoption of Proportional Representation

The debate between economic and political explanations of the adoption of proportional representation (PR) has occupied an important place in recent years. The existing tests of these competing explanations have generated inconclusive results. We re-examine this debate and argue that the causal mechanisms affecting politician’s decisions to reform the electoral system operate at different levels of analysis. Reformulating Rokkan’s hypotheses, we show that both partisan dissatisfaction with the translation of seats to votes and strong electoral competition at the level of the district affect the decisions of politicians to support changes in electoral institutions. In the empirical part, we evaluate the relative importance of (a) district level electoral competition and vulnerability to the rise of social democratic candidates (b) partisan calculations arising from disproportionalities in the allocation of votes to seats and (c) economic conditions at the district level, more specifically variation in skill profiles and ‘co-specific investments’ in explaining legislators’ support for the adoption of proportional representation.

Measuring the Individual-Level Determinants of Social Insurance Preferences: Survey Evidence from the 2008 Argentine Pension Nationalization

This study employs an original, nationally representative survey of citizens in Argentina to understand the economic and political factors that shape individual-level preferences for social insurance. In the past two decades, Latin American democracies have undergone significant changes in their social welfare institutions, in some cases dramatically reversing course from previous policies. We develop a theoretical framework to explain how and when citizens shift their preferences for competing social policy proposals. We emphasize the role of dissatisfaction with prevailing policies in creating political opportunities for the introduction of sweeping reforms. Our survey capitalizes on the 2008 pension reform in Argentina to test competing hypotheses regarding preferences for different policies of old-age insurance. We find that dissatisfaction with existing private policies increases individual-level support for policy reform across all citizens, whereas partisanship has a more restricted effect, shaping preferences only among middle- and low-income respondents.

Explaining the “Return of the State” in Middle-Income Countries Employment Vulnerability, Income, and Preferences for Social Protection in Latin America

In recent decades, developing and middle-income countries around the globe have adopted path-breaking reforms to their social protection systems. Latin America has been a pioneer region, expanding the state’s commitment on behalf of low-income citizens in key policy areas in many countries. This paper undertakes two tasks. First, it documents the surprising extension of noncontributory social protection policies across many Latin American countries, highlighting how tax-financed programs have come to play a central role in a variety of settings. Second, it examines citizen-level preferences that support this trend, arguing that employment vulnerability and threats to income continuity play a decisive role in shaping demand for public, rather than private, social protection. Survey data on labor-market risks and social policy preferences from eighteen countries corroborate these claims. Our findings suggest that other countries undergoing labor-market strains may experience similar demands for a “return of the state” as a guarantor of social protection in the coming years.

Labor Shortages, Rural Inequality, and Democratization

A large body of scholarship has asserted that inequalities in the distribution of fixed assets act as a barrier to democratic transitions. This article proposes a theoretical and empirical amendment of this finding, by arguing that employment conditions in the countryside, rather than inequalities in the distribution of fixed assets affected electoral outcomes in societies characterized by high levels of rural inequality. Using empirical evidence from the Prussian districts of Imperial Germany during the period between 1871 and 1912, we show that relative labor market shortages of agricultural workers affected electoral outcomes under conditions of an imperfect protection of electoral secrecy. Shortages of agricultural workers reduced the electoral strength of conservative politicians and increased the willingness of rural voters to “take electoral risks” and vote for the opposition Social Democratic Party. Labor shortages also affect preferences of individual legislators over the reform of electoral institutions. We find that politicians in districts experiencing high levels of labor shortage, and thus, higher costs of electoral intimidation are more willing to support changes in electoral rules that increase the protection of electoral secrecy. In theoretical terms, our findings contribute to the literature linking rural inequality and democratization, by demonstrating the importance of labor scarcity as a source of political cleavages over electoral reforms.

Unfinished Business The Democratization of Electoral Practices in Britain and Germany

This article explains legislators’ support for electoral reforms reducing electoral irregularities and protecting voters’ autonomy at the ballot box in Britain and Germany in the late 19th century. We argue that the main political cleavage over the adoption of new legislation to limit illicit electoral practices pitted politicians able to take advantage of opportunities for vote buying and intimidation against those who could not do so because of unfavorable political and economic conditions in their district. We examine the political, partisan, and economic factors accounting for candidates’ ability to engage in electoral irregularities and show that, in both countries, resource-constrained candidates were more likely to support the introduction of electoral reforms. Because the primary illicit electoral practice differs across these two cases—vote buying in Britain and economic intimidation in Germany—some of the political and economic factors accounting for legislators’ support for reform differ across these cases.

Redefining Who's 'In' and Who's 'Out': Explaining Preferences for Redistribution in Bolivia

How does welfare state expansion reconfigure political coalitions? Traditional accounts of the welfare state in advanced industrial economies emphasize the tendency for policy “insiders” -- those already incorporated in social insurance systems -- to resist further expansions since this would dilute their share of benefits, while “outsiders” support increases in social insurance coverage. However, this paper argues that preferences regarding social insurance are instead the product of two other coalition-forming factors, and that these can produce broad-based support for policy expansion in developing and middle-income countries. First, where the informal economy dominates the labor market, formal “insiders” may be particularly sensitive to the risk of job loss or temporary unemployment or informal employment; they thus have less confidence in their long-term ability to find security in contributory insurance schemes, and they are willing to make common cause with policy outsiders in supporting expansion. Second, given the complexity of social insurance schemes, especially in low-information environments, political partisanship provides strong cues to individual citizens about how to evaluate competing policy options. Parties can use these cues to swing opinion toward new redistributive policies that would expand their political base.This paper tests these hypotheses in two ways in the context of Bolivia. First, it examines three key social insurance configurations in Bolivia over the last thirty years, analyzing the preferences and coalitions that supported each system. Second it uses an original survey carried out in Bolivia following that nation’s 2007 extension of a noncontributory national minimum pension. It shows that citizens formed their preferences in favor of expansion based on their perception of labor market risk, particularly as they compared the current state of the economy to that of a year before. To the extent that insiders opposed the expanded pensions, they were most sensitive to the issue of how inclusion of the outsiders would affect their benefit stream. Finally, the paper shows that partisanship -- proxied by support for Evo Morales’ MAS party and his government -- was strongly related with support for the introduction of the national minimum pension.

The Core Voter’s Curse: Clientelistic Threats and Promises in Hungarian Elections

In elections around the world, voters are influenced not only by positive offers of gifts and favors but also by the threat of negative sanctions for their individual electoral choices. Preelectoral entitlements such as jobs, assets, and welfare create expectations of future access that brokers can use as powerful negative inducements at the moment of the vote. We argue that in conditions where ballot secrecy makes it difficult to monitor vote choices, brokers are likely to target core supporters with both preelectoral entitlements and election-time threats. We refer to this counterintuitive logic as the “core voters’ curse.” We find evidence for this argument using an original household survey of 1,860 Hungarian citizens in 93 rural communities fielded shortly after the 2014 parliamentary election.

Pressure, Favours, and Vote-buying: Experimental Evidence from Romania and Bulgaria

Abstract This article examines the mix of non-programmatic strategies used by politicians to gain voter support in contemporary Eastern Europe. We use a mixed-method design that combines survey-based experiments and qualitative research in a paired comparison of localities in Romania and Bulgaria. Our article documents that the mix of clientelistic strategies differs across localities with different turnover rates. In both Romania and Bulgaria, we find that the use of clientelistic strategies that politicise state resources is higher in localities with long-term political incumbents.