Governing parties and income inequality in Australia (1981-1990), the United Kingdom (1979-1986) and Canada (1971-1981) Rational policy-making in party organizations.

This study examines the impact of governing parties in changing patterns of income inequality in three liberal democracies with 'Westminster' systems - Australia (1981-1990), the United Kingdom (1979-1986) and Canada (1971-1981). Extensive analysis of the Luxembourg Income Study datasets for these countries and periods suggests that structural factors, such as changes in the market sphere or alterations in the demographic profiles, can account for only a part of the overall inequality trends in these periods. By using income decomposition analyses, this study indicates that government redistributive policies played an important role in changing inequality trends. Governments in all three countries are single-party operations, and policy responds strongly to partisan processes and considerations. The main question involved in assessing policy changes is therefore why party actors may be willing to increase or decrease income inequality. Applying conventional 'unitary' models of party behaviour (such as the median voter convergence hypothesis) to try and explain decision-making on income inequality also cannot explain these examples. It seems that redistributive policies can only be understood by taking account of the bargaining processes which take place within the organization of the party in power. Explanations of how parties intervene on income inequality should explicitly incorporate the organizational dimension as a key to their behaviour.