Why Did the West Extend the Franchise? Inequality and Growth in Historical Perspective

During the nineteenth century, most Western societies extended the franchise, a decision which led to unprecedented redistributive programs. We argue that these political reforms can be viewed as strategic decisions by political elites to prevent widespread social unrest and revolution. Political transition, rather than redistribution under existing political institutions, occurs because current transfers do not ensure future transfers, while the extension of the franchise changes the future political equilibrium and acts as a commitment to future redistribution. Our theory offers a novel explanation for the Kuznets curve, whereby the fall in inequality follows redistribution due to democratization. We characterize the conditions under which an economy experiences the development path associated with the Kuznets curve, as opposed to two non-democratic paths; an `autocratic disaster', with high inequality and low output; and an `East Asian Miracle', with low inequality and high output