Dissatisfaction with Democracy : Inequality or Jobs?

Satisfaction with democracy varies widely across countries within the European Union (EU) and satisfaction in nearly half of EU countries is lower than it was a decade ago. I use data from a number of sources to study the relationship between satisfaction with democracy and country-level conditions. Perceptions of the government's ability to act in good faith (control of corruption) is the strongest institutional predictor of satisfaction with democracy. Satisfaction with democracy is also associated with better economic conditions, measured by average income and the unemployment rate. Together these institutional and economic factors explain roughly 4/5ths of the variation in satisfaction with democracy. However, despite widespread public attention, inequality, measured by the gini coefficient, does not explain dissatisfaction with democracy, which suggests that distributional concerns are not paramount. In contrast, spending on active labor market programs can increase satisfaction with democracy by 10-15 percentage points. This result is not explained by spending on income-based labor market programs, total spending on labor market programs or total spending on social programs. In fact, spending on programs designed only to replace labor income tends to reduce satisfaction with democracy. Active labor market programs may promote connection to the polity and society at large via attachment to the workforce