Classist Democracies

We study classist societies where the middle class fight over redistribution of public funds with the marginalized and over social policies with the elites. We show that such societies are often deprived of well-defined majoritarian preferences, underscoring the importance of the party system. Representative democracies are non-redistributive and conservative with few marginalized voters; but with many, they become redistributive and progressive. With an intermediately-sized marginalized population, democracies lose competitiveness, witness uncertainties about social policies and economic redistribution, and foster polarization and government-capture by minoritarian elite-marginalized alliances. Here, democracies can elect governments that are redistributive yet conservative, or non-redistributive but liberal