1 The Directing Power ? A Comparative Study of Public Opinion and Income Distribution

Although a number of studies have examined the influence of public opinion on government policy, few have considered the influence of public opinion on social conditions. These are separate questions, since government policies may not have their intended effects and opinion may influence some outcomes independently of government action. This paper examines the relationship between public support for wage differentials and income inequality in 46 nations. It finds that the distribution of income is more equal in nations where public opinion is more egalitarian. The association is stronger when opinion is measured by the opinions of upper-income people, suggesting that people with higher incomes have more influence. There is no evidence that the relationship between opinion and inequality is stronger in nations with democratic governments. In order to allow for the possibility of reciprocal causation, we carry out an instrumental variables analysis and find that the estimated effect of opinion on income inequality remains significant.