Elite Networks The Political Economy of Inequality

Cover
Elite Networks
Copyright
Dedication
Contents
Preface
Acknowledgments
Introduction: Connecting Elite Power to Inequality
I.1. Main Contributions
I.2. Why Join Elite Networks? The Three Principles
I.3. Why Should Elite Networks Have Any Effect on Inequality?
I.4. The Cyclicality of Inequality
I.5. What This Book Does Not Do: External Validity Limitations and Potential Extensions
I.6. Structure of the Book
1. Why Study Elite Networks?
1.1. Defining Elite Networks: Informal Mutually Beneficial Interactions between Political and Corporate Elites
1.1.1. Does It Pay Off to Be Part of the Network?
1.1.2. The Role of Institutions
1.1.3. Elite Theory in Sociology
1.1.4. The Spontaneous Nature of Elite Networks
1.2. Visualizing Elite Networks
1.3. Putting Elite Networks on the Map of Political Interactions
1.4. Quantifying Elite Network Outcomes
Part I: The Impact of Elite Networks on Inequality
	2. Evolution of Elite Networks and Inequality: Inequality in the Very Long Run
		2.1. The Agricultural Revolution: From Hunter-​Gatherers to Settlers
		2.2. How Exactly Did Farming Translate to Inequality?
		2.3. Proto-​States and the Formation of Hierarchical Orders
		2.4. Concentration of Wealth in Ancient Civilizations: Rise of the Malthusian Economic Model
		2.5. The Long Malthusian Trap: Inequality and Elite Concentration during the Middle Ages until the Industrial Revolution
		2.6. Wealth Concentration and Elite Power in the 19th and 20th Centuries: From a “Society of Rentiers” to a “Society of Managers”
	3. Democracy and Inequality in the Short Run
		3.1. The Switch toward Democracy
		3.2. The Relationship between Democracy and Inequality
		3.3. The Rise of Government Spending in Democracies
		3.4. The Rise of Inequality in Democracies
		3.5. Economic Explanations of the Rise of Inequality
		3.6. Political Factors That Could Help Explain the Rise of Inequality
	4. Political Networks and Wages of Top Corporate Income Earners
		4.1. Data and Variables
			4.1.1. Measuring Networks and Connections of Individuals and Firms
			4.1.2. Correlation between Political Connections and Network Size
		4.2. Inequality in Top Executive Incomes
		4.3. Empirical Strategy and Results
			4.3.1. Results: United States
			4.3.2. Results: United Kingdom
		4.4. The Impact of Political Connections on Executive Salaries in Other Countries
Part II: Inside the Logic of an Elite Network
	5. The Internal Logic of an Elite Network
		5.1. Network Theory of Elites
			5.1.1. The Link between Clustering and Size of Networks
			5.1.2. The Centrality of Elite Network Superhubs
			5.1.3. Historical Examples of Elite Networks
			5.1.4. Incentives for Firms and the Impact on Inequality
		5.2. Economic Theory: Costs and Benefits of Elite Network Membership
		5.3. Joining Elite Networks to Mitigate Risk and Achieve Status: The Three Principles
	6. Motivation for Politicians: Extracting Rents and Staying in Power
		6.1. Corruption, Clientelism, and Rent-​Extraction
			6.1.1. Political Agency
		6.2. Do Voters Punish Corruption?
		6.3. Elite Networks and the Selectorate Theory
			6.3.1. The Nonlinearity between Corruption and Political Survival
		6.4. Case Study: Using Corruption and Minimum Winning Coalitions to Stay in Power
			6.4.1. The Impact of Minimum Winning Coalitions
	7. The Role of the Firm
		7.1. Rent-​Seeking vs. Customer-​Seeking Firms
		7.2. How Firms Benefit from Collusion with Politics
		7.3. The Revolving Door between Politics and Finance
		7.4. Case Study: Political Allocation of TARP Funds during 2008 and 2009
Part III: Reducing Political Power, the Root Cause of Inequality
	8. Capitalism and Democracy
		8.1. How Far Have We Come?
		8.2. Persistent Incentive to Change
		8.3. The Gradual Shift to Democracy
		8.4. Democracies as a Trial-​and-​Error Process
		8.5. Socialism’s Rapid Industrialization with a Lack  of Trial-​and-​Error in the Underdeveloped Periphery
			8.5.1. Condensing 200 Years of Gradual Progress into 30 Years of Rapid Growth
	9. The Pitfalls of Political Power: Expanding the Scope of Government to Reduce Inequality
		9.1. Progressive Taxation
			9.1.1. The Unprecedented 30-​Year Period That Brought  Down Inequality
			9.1.2. The Artificial Decrease of Inequality
		9.2. Adverse Selection into Politics
			9.2.1. Personalization of Governing Institutions
		9.3. The Importance of Trust
	10. The Three Levers
		10.1. Moving beyond Standard Approaches: Introducing the Three Levers
		10.2. First Lever: Reducing Political Power
			10.2.1. Full Transparency of Budgetary Spending and Decision-​Making
			10.2.2. Encourage and Promote Free, Independent Media
			10.2.3. Term Limits and Strict Conditions for Holding Office
			10.2.4. Reduce Discretionary Decision-​Making Power and Introduce Rule-​Based Politics
			10.2.5. Reduce the Scope of Centralized Government
			10.2.6. Minor Reforms That Could Strengthen the First Lever
		10.3. Second Lever: Re-​Empowering the Citizens
			10.3.1. Give Citizens the Ability to Take Control of Their Tax Payments
			10.3.2. Mandatory Participatory Budgeting for Community Public Good Provision
			10.3.3. Granting Impeachment Powers to the Citizens for Direct Punishment of Officials
		10.4. Third Lever: Re-​Empowering the Community
			10.4.1. Decentralize and Depersonalize Decision-​Making over Allocation of Public Funds
		10.5. Second-​ and Third-​Order Effects of the Three Levers
Afterword
Notes
References
Index