Economic History Seminar

Abstract: This paper tests the relationship between inequality, democratization and expenditure on poor relief in England and Wales between 1885 and 1905. Poor relief served as the main form of social insurance at that time and, in contrast to modern day welfare programs, was provided by elected local governments. As a result, policy varied substantially across the country in terms of both the magnitude and nature of the support provided. Prior to 1894, a number of institutional features---graduated franchise, the absence of a secret ballot, and the participation of unelected magistrates---helped elites to control these local councils, and hence poor law policy. These advantages were removed by a national reform in 1894, an event which serves as the treatment event in a difference-in-difference analysis. The analysis tests whether the effect of this reform varied according to the level of inequality in each district, as predicted by theoretical models of democratization. The results show that, consistent with those theories, unequal districts experienced greater increases in poor law expenditure post democratic reform.