Endogenous Constitutions

We present a theory of the choice of alternative democratic constitutions, a majoritarian or a consensual one, in an unequal society. We show that a consensual system turns out to be preferred by society when ex ante income inequality is relatively low, while a majoritarian system is chosen when income inequality is relatively high. We also find that consensual democracies should be expected to be ruled more often by centre-left coalitions while the right should have an advantage in majoritarian constitutions. The implications for the relationship between inequality and redistribution are discussed. Historical evidence and a cross-sectional analysis support our results.