THE PARTY SYSTEM, ELECTIONS, AND SOCIAL POLICY
Richard Johnston University of Pennsylvania (
[email protected]) (after 1 July 2009) University of British Columbia (
[email protected])
May 2009
DRAFT: DO NOT COPY OR QUOTE WITHOUT PERMISSION FROM THE AUTHOR.
Prepared for presentation at the conference on The New Politics of Redistribution in Canada, Ottawa, Ontario, 25 May 2009.
THE PARTY SYSTEM, ELECTIONS, AND SOCIAL POLICY This paper will focus on the possible contribution of parties and elections in shaping the Canadian version of rising inequality. The first task is to localize the period of special relevance, which appears to be the years between 1994 and 2000. Then follows a canvass of political possibilities. One part is the competitiveness of Canadian elections in the critical period, with implications for the governing party’s freedom of action—“electoral slack” in Pierson’s (1996) terminology. This goes to the question of the government’s ability to impose losses on some or all sectors of the Canadian political economy. The other part is the system’s ideological balance, that is, how accommodating the party system might have been to the imposition of losses on poor Canadians in particular. Although the evidence and arguments are circumstantial, they suggest that the mid-1990s were the period of greatest direct impact of political choices on income distribution. Before 1994 the taxation and redistribution system insulated Canadians against pressures toward inequality. Then from 1994 to roughly 2000, the political system accommodated those pressures dramatically. After 2000, a new equilibrium appeared, with markedly more unequal outcomes than prevailed in 1980. The electoral earthquake of 1993 may have facilitated the government’s aggressive response to Canada’s fiscal predicament. For a decade after 1993, it was almost impossible to imagine an alternative to government by the Liberal party. But 1997 may have been a warning shot to the Liberals that outright majorities could not be taken for granted. If the government’s comfort level, especially before 1997, was critical to its general posture of retrenchment, this still leaves open why so much of the burden fell on the poorest Canadians. For this, a rightward lurch in the party system may have been required, and such a lurch certainly occurred. THE TIMING OF GROWTH IN INEQUALITY Figure 1 decomposes trends in inequality growth. Panel A plots Gini coefficients for three definitions of income; these are the data Banting and Myles put in circulation some months back. All three indicators have grown, but on different trajectories. Most critical for my purposes is the gap between market income and after-tax income. Until 1994, the redistributive system essentially held the line in face of mounting pressure on market incomes. This is the lesson of panel B, which initializes each income plot at its 1980 value. Although the after-tax distribution for 1994 is slightly less equal than in 1980, this could be an artifact of starting points. Had I initialized relative to say, 1983, the change would have been effectively nil. As it is, the change is small relative to the shifts in both other indicators, especially in the indicator for market income. Over the same period the inequality gap with total income also widened slightly, which I take to imply that in mitigating market inequalities the tax system was working harder than the cash transfer system. In any case, as panel C shows, after-tax inequalities surged in the years following 1994, and these shifts were almost exactly matched in total income inequality. But the inequality gap with market incomes shrank: political choices permitted inequality to grow at a faster rate than dictated by market forces alone. Three-quarters of the after-tax shift was accomplished in only two years, 1994-6, with half the overall gain registered in the
1
very first year. Since 2000, there has been no further growth in post-tax inequality. But then the same is true for market income. THE GOVERNMENT’S FREEDOM OF ACTION It may be no accident that the government’s hand was dramatically strengthened by the electoral earthquake of 1993. Figure 2 flags the three elections of 1993-2000 to portray three facets of the government’s position, as compared with the years before and since. The first point, in panel A, is that the 1990s continued the Canadian pattern of singleparty majority governments. From 1974 to 2004, the country experienced minority government for less than a year and from 1968 to 2004, for less than three years. What is more, the 1993 majority was by postwar standards reasonably comfortable. Of course, it could not match the lopsided Liberal majority in 1949 or the lopsided Conservative ones of 1958 and 1984. But the government’s seat share was above the median for postwar majority governments. It was rather larger than the Conservative share in 1988 and eight points larger than the Liberal majority in 1980. All this was true notwithstanding weakness in the Liberal poplar vote. The 1993 vote share was the weakest to that date for any party that won a majority of seats. Indeed it was weaker than for one minority government, the Liberals in 1963, and barely larger than for some other minorities. But if the Liberals were electorally weak, the opposition was weaker still. More to the point, the opposition was fragmented. Panel B shows one critical aspect of this fragmentation, the vote gap between the governing party and its most plausible rival.1 In the postwar years, the gap was never greater than in 1993, and it closed only modestly over the decade (with most of the change coming only in 2000). The width of the gap is all the more striking considering how small the Liberals’ own share was. The years that most closely rival 1993 for the gap are 1984 and 1958, two Conservative landslides. Next in line (1997 aside) are 1953 and 1949, years with lopsided Liberal majorities. So 1993 is a year with a truly weak major rival. Similarly testifying to the opposition’s predicament is panel C. This gives the “effective number” of opposition parties, with a modified version of the Laakso-Taagepera (1979) index. In this case, the total opposition vote or seat share, as the case may be, is used as the denominator. The intuition behind the indicator is that a system has more parties—in other words, is more fragmented—the larger is the number of nominal alternatives and the more equal in size the alternatives are. Panel C shows that where in the 1988-93 House, the opposition comprised 1.5 parties—basically the Liberal Official opposition and an NDP with about half as many seats as the Liberals—in 1993, the number of opposition parties in the House ballooned to 2.4. Reform and the Bloc had roughly the same number of seats and can each be thought of a “whole” (although small) party, with the remaining 0.4 “parties” being the shrunken NDP and a mere morsel of the
1
Usually this rival is also the Official Opposition. In 1993, that party was the Bloc Québécois, never a plausible rival for power. So for 1993 as for 1997 and 2000 the rival party is deemed to be Reform/Alliance.
2
Progressive Conservative Party. And collectively these 2.4 proto-units shared only 40 percent of the seats in the House. The upshot is that the Liberals position was, or seemed, very strong. Even if their parliamentary majority was not of epic proportions, it was one of the strongest of the postwar period,. Even more critical was that there was no plausible rival. To paraphrase CD Howe, “Who was gonna stop them?” On the evidence so far, the Canadian case may be close to a perfect storm of conditions identified by Pierson (1996) in his account of the general resilience of welfare states. The years after 1993 arguably fit his condition of electoral slack, “when governments believe that they are in a strong enough position to absorb the electoral consequences of unpopular decisions” (p. 176). Other governments had comparable slack, but none had more. It is probably no less critical that the Chrétien government fulfilled two other conditions identified by Pierson. Firstly, 1994 was a year of fiscal crisis, such that the country was on credit watch, helped along by stage-setting by the government’s own Department of Finance (Canada 1994). Earlier similarly comfortable Canadian governments probably did not face comparable pressure for retrenchment. Second, the Canadian system permits obfuscation. Pierson notes that Westminster systems’ concentration of executive power helps governments obscure the impact of policy change. In Canada this executive centralization coexists with jurisdictional decentralization, which facilitates shifting the political burden downward to the provinces.2 Did the halt in inequality growth reflect altered political circumstances? An argument to this effect can be constructed. Certainly, the 1997 election looked like a warning signal. The Liberal party’s own vote share dropped modestly and its parliamentary share dropped dramatically. It held its majority mainly because the opposition vote was even more fragmented than before, with both the NDP and the Conservatives rallying. Although the political complexion of the new parliament would have left the government with ample room to manoeuvre, the electoral signal was widely interpreted as a reaction to three years of retrenchment. This was true even for the Conservative surge, which occurred mainly in Atlantic Canada and Quebec. The 2000 election might have been taken by the Liberals as vindication for the halt in the rise of inequality. Both the NDP and PC shares retreated, arguably because each party had served its purpose but also as the threat from the Alliance (old Reform) seemed greater. The 1997-2000 sequence could be read to indicate that the electoral slack that seemed to prevail before 1997 was somewhat illusory. The illusion was powerful enough to drive the initial retrenchment but not to sustain it beyond 1997. Although this does seem like a reasonable reading of electoral events it could be that the growth in inequality in after-tax incomes reflected nothing more than the fact that market-income inequality seemed to stabilize. 2
Pierson’s discussion of crisis and institutional facilitation is at p. 177. A difficulty for my argument is that the Mulroney government, 1984-8, also enjoyed an exceptionally strong parliamentary position and also faced pressure for cutbacks. Although it did venture such cutbacks and did impose losses on the provinces, it clearly held the line on income inequality.
3
POWER RESOURCES CONSIDERATIONS All this leaves open the question of why the burden of retrenchment fell so heavily on the poor. The answer may lie in the signals emitted by the electorate. Arguably, voters sent the most conservative signal in postwar history in 1993, and backed off only modestly in 1997. I offer two bodies of evidence in support of this claim. The first refers to the place of the union movement—more precisely of union families. The literature on the growth of the welfare state emphasizes the size of a country’s union movement and the explicitness of its links to the party system. Korpi and Palme (2003), in contrast to Pierson (1996), emphasize the continuing importance of “power resources” in the era of retrenchment. So it makes sense to gauge the electoral place of the Canadian union movement, in general and for the 1990s in particular. Figure 3 plots the difference made in CCF/NDP support by whether or not a voter’s family includes a union member. Estimates are ceteris paribus, extracted from probit estimations that also include ethnic, religious, and regional variables. Quebec respondents are always excluded.3 One source of evidence is the Gallup poll, which allows us to go back to the 1950s but to advance no further than 2000. The other source is the Canadian Election Study (CES) which starts only 1965 but brings us almost to the present. Although the plots differ in detail, they tell broadly the same story. And that story is of peculiar NDP weakness as a representative of organized labour in the 1990s. With little trend before 1993, union families were 10-15 percentage points more supportive of the NDP than were non-union families. There is little evidence of a qualitative shift after the formalization of the link and creation of the NDP in 1961.4 In the 1990s, however, the union/non-union contrast collapsed. Depending on the data source, the effect was cut either in half or by two-thirds. There may have been a small recovery in the effect, as there also was in the NDP share, in 1997. In 2000, according to the CES at least, the class effect reached a new low. Of course, these weak effects also coincide with an historic weakness in the NDP’s overall share. Although the 1993 collapse of the Progressive Conservative vote has been much remarked, the NDP collapse was proportionally just as great, if with a less dire effect on the party’s seat share. In 1993 the NDP was reduced to a national popular vote share no bigger than that returned by the CCF in 1935.
3
The labour movement in Quebec has essentially never aligned itself in partisan terms with the movement in the rest of Canada. Before the advent of the Bloc Québécois, Quebec union families tended to vote disproportionately Conservative or even Social Credit. Now their support is very strongly for the Bloc. Both patterns reflected the Quebec labour movement’s alignment with Quebec nationalism. 4
Given the handwringing by Canadian scholars about the weakness of class effects in Canadian elections, the evidence in Figure 3 may come as a surprise. Most of the Canadian literature focuses on occupational or on subjective indicators. Disputes turn on how to classify parties (Liberals to the left or right, same for old Social Credit), how to classify occupations (manual versus non-manual, as opposed to something more complex), and how to index statistical differences cross-national comparisons (coefficients as opposed to odds ratios). Notwithstanding the passion in these disputes it is hard to avoid the conclusion that the Canadian party system has one of the weakest class foundations in the world (see Evans 1999). The picture does alter, however, when one looks at the union/non-union contrast, pace Archer (1990). See also the evidence in Johnston (forthcoming), Table 1.
4
The collapse of the NDP was only one part of the story. The party system as a whole shifted to the right, as indicated by Figure 4. This figure plots party positions on welfarestate spending for the entire postwar period to 2000, as revealed by their campaign manifestoes. Positions are inferred from the frequency and direction of mentions in each party’s platform for each election. The coding scheme was devised and executed by the Manifesto Research Group/Campaign Manifesto Project.5 For Figure 4, I subtracted negative from positive mentions. As the figure suggests, negative mentions are greatly outweighed by positive ones. An outstanding feature of Figure 4 is the spike in welfarestate advocacy in the mid-1960s, just as the Canadian system was reaching its mature form. Also clear is that the NDP anchors the left over virtually the entire period, occasionally outflanked by the Liberal Party. The Progressive Conservatives generally held down the right, before 1974 often to the right of Social Credit. All this is backdrop to 1993. In that year, only the NDP remained in place as the advocate of welfare-state spending. The Conservatives had moved to the right over the preceding decade and the Liberals tacked clearly right relative to 1988. Most important, though, is the breakthrough of Reform. In 1993 (and 1997) the Reform manifesto featured more negative references to welfare-state spending than positive ones. This was the only net negative platform on the entire run of postwar history. As of 1993, the generally leftleaning Bloc had little to say about the welfare state. Panel B converts this into a reading for the party system as a whole. The systemic reading is simply the average of the manifesto positions of all competitive parties weighted by each party’s proportion of the national popular vote. So in 1993, for instance, the unchanged position of the NDP on the left loses value relative to 1988 because of shrinkage in the party’s vote share. The arrival of Reform, conversely, pulls the system to the right because of both the party’s extreme rightist position and its relative electoral success.6 If this can be taken to indicate whether, electorally speaking, there is room to move against the welfare state, then at no point in the entire postwar period was there more such room. It is awkward for this argument that in 1997 the party system shifted left only slightly. But the shift that did occur is a compound of leftward policy shifts by the NDP and the Progressive Conservatives, the two parties that gained ground that year. In 2000 all parties apparently drew the same lesson from 1997 and its aftermath. In that year, every party shifted left, even the newly constituted Alliance. The movement was so uniform and so dramatic that the system as a whole yielded the second strongest (after 1965) prowelfare state signal of the entire postwar period.
5
The primary source of data is the disk included in Budge et al. (2001), which is also the key source for coding conventions. Data for 1997 and 2000 are from the data disk in Klingemann (2006).
6
This construction has affinities with McDonald’s and Budge’s (2005) notion of the median mandate. My indicator incorporates information about the system’s total distribution, as opposed to the location of its centre. The divergence between our measures reflects the difference in our objectives.
5
DISCUSSION There is, then, a circumstantial case that the elections and the party system played a role in the 1990s surge in after-tax inequality. The minimal claim is that the surge was almost entirely contained by one Parliament. A bolder claim is that the 1993 election created at least the appearance of sufficient electoral slack to enable a bold, inegalitarian retrenchment. Complementarily, the 1997 election could be interpreted as a warning signal for the government to go no further, which it did. The boldest claim of all is that the 1993 election could be interpreted as something of a mandate for retrenchment. The 1997 result arguably complemented the 1993 one in this “mandate” sense as well. These claims leave many loose ends. First of all, although the “slack” and mandate interpretations can be read as complementary, they also make the situation overdetermined. To extent that the 1993 result could be interpreted as a mandate for retrenchment on the backs of the poor, then the electoral slack interpretation is redundant. The “mandate” story, meanwhile, may say something about elections but not much about the party system. It implies that elections are a reasonably sensitive register of real opinion. This requires us to take shifts among parties entirely at face value. The shifts must reflect the parties’ positioning on welfare-state spending, as opposed to other issues, and must not be coloured by strategic considerations. The emergence of Reform certainly placed a very conservative party in the House, mainly at the expense of the Progressive Conservatives. It also moved voters, net, from the NDP to the Liberals, also a rightward shift. But these moves were informed as much by reaction to the constitutional controversies of the preceding years as by welfare-state considerations. And the NDP-toLiberal shift also involved strategic considerations, motivated by desire to consolidate against the right—first to punish the Conservatives for the Mulroney years and then out of fear of Reform.7
7
Evidence for most of these assertions can be found in Johnston (2005).
6
Figure 1 – The Timing of Growth in Inequality
0.32
0.30
0.30
0.28
0.28 2007 2008
0.34
0.32
2004 2005 2006
0.36
0.34
2001 2002 2003
0.36
1999 2000
0.38
1996 1997 1998
0.40
0.38
1993 1994 1995
0.42
0.40
1990 1991 1992
0.44
0.42
1986 1987 1988 1989
0.46
0.44
1983 1984 1985
0.48
0.46
1980 1981 1982
0.48
1978 1979
Gini coefficient
A. Gini coefficients
Market Income Total Income After-Tax Income
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0.00
1989
0.00
1988
0.02
1987
0.02
1986
0.04
1985
0.04
1984
0.06
1983
0.06
1982
0.08
1981
0.08
1980
Gain in Gini since 1980
B. Growth relative to 1980
Market Income Total Income After-tax Income
0.04
0.04
0.03
0.03
0.02
0.02
0.01
0.01
Market Income Total Income After-tax Income
7
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
-0.01 1982
0.00
-0.01 1981
0.00
1980
Gain in Gini since 1994
C. Growth relative to 1994
Figure 2 – The Strength of the Government’s Position
2008
2006
2004
2000
1997
1993
1988
1984
1980
30 1979
30 1974
40
1972
40
1968
50
1965
50
1963
60
1962
60
1958
70
1957
70
1953
80
1949
80
1945
Share of national total
A. Governing party’s seat and vote shares
Election Seats Votes
2008
2006
2004
2000
1997
1993
1988
1984
1980
10 1979
10 1974
20
1972
20
1968
30
1965
30
1963
40
1962
40
1958
50
1957
50
1953
60
1949
60
1945
Share of national popular vote
B. Governing party’s advantage over the main rival
Election Government Opposition
Election Parliamentary Electoral
8
2008
2006
2004
2000
1997
1993
1988
1984
1980
1979
1974
0.5 1972
1.0
0.5 1968
1.5
1.0 1965
2.0
1.5
1963
2.5
2.0
1962
3.0
2.5
1958
3.5
3.0
1957
4.0
3.5
1953
4.5
4.0
1949
4.5
1945
Effective number of opposition parties
C. Fragmentation of the Opposition
0 2006
0 2004
2
2000
2
1997
4
1993
4
1988
6
1984
6
1980
8
1979
8
1974
10
1972
10
1968
12
1965
12
1963
14
1962
14
1958
16
1957
16
1953
Union/non-union difference
Figure 3 – The Union Movement and the CCF/NDP
Election Canadian Election Studies Gallup Polls
Note: Entries are marginal effects estimated by probit, extracted from saturated estimations. Respondents outside Quebec only.
9
Figure 4 – The Party System and the Welfare State
Support for Welfare State
A. Support for welfare spending by individual parties
50
50
40
40
30
30
20
20
10
10
0
0
2000
1997
1993
1988
1984
1980
1979
1974
1972
1968
1965
1963
1962
1958
1957
1953
1949
-10 1945
-10
Election NDP Liberal PC Reform Social Credit BQ
Election
10
2000
1997
1993
1988
1984
1980
0 1979
0 1974
5
1972
5
1968
10
1965
10
1963
15
1962
15
1958
20
1957
20
1953
25
1949
25
1945
Weighted mean of party locations
B. Support for welfare spending by the party system
REFERENCES Archer, Keith. 1990. Political Choices and Electoral Consequences: A Study of Organized Labour and the New Democratic Party, Montreal: McGill-Queen's University Press. Budge, Ian, Hans-Dieter Klingemann, Andrea Volkens, Judith Bara, and Eric Tanenbaum. 2001. Mapping Policy Preferences: Estimates for Parties, Electors, and Governments, 1945-1998. Oxford, UK: Oxford University Press. Canada, Government of. 1994. A New Framework for Economic Policy. Ottawa: Finance Canada. Evans, Geoffrey, ed. 1999. The End of Class Politics? Class Voting in Comparative Context. Oxford: Oxford University Press. Johnston, Richard. 2005. Canadian Elections at the Millennium, in Paul Howe, Richard Johnston, and André Blais, eds. Strengthening Canadian Democracy. Montréal, IRPP: pp. 19-61. __________ . Forthcoming. Structural Bases of Canadian Party Preference: Evolution and Cross-National Comparison, in Mebs Kanji, Antoine Bilodeau, and Thomas Scotto, eds., Four Decades of Canadian Election Studies: Learning from the Past and Planning for the Future. Vancouver: University of British Columbia Press. Klingemann, Hans-Dieter, Andrea Volkens, Judith Bara, Ian Budge, and Michael McDonald. 2006. Mapping Policy Preferences II: Estimates for Parties, Electors, and Governments in Eastern Europe, European Union and OECD 1990-2003. Oxford: Oxford University Press. Korpi, Walter, and Joakim Palme. 2003 New Politics and Class Politics in the Context of Austerity and Globalization: Welfare State Regress in 18 Countries, 1975-95. American Political Science Review 97: 425-46. Laakso, Markku, and Rein Taagepera. 1979. “Effective” Number of Parties: A Measure with Application to West Europe. Comparative Political Studies 12: 3-27. McDonald, Michael D., and Ian Budge. 2005. Elections, Parties, and Democracy: Conferring the Median Mandate. Oxford: Oxford University Press. Pierson, Paul. 1996. The New Politics of the Welfare State. World Politics 48: 143-79.
11
