An elite democracy refers to a system of government in which the leaders of large bureaucratic organizations, corporate, governmental or nonprofit, are able to exercise a significant degree of influence on society. Most of the elected leaders in an elite democracy owe their positions to the sponsorship of these bureaucratic leaders, or elites, and will legislate in a manner that favors them. According to the elite theory in sociology and political science, a small minority of corporate, financial or think-tank policy-discussion organizations wield power to a greater degree than the processes of the state's democratically-elected government.
In the classical elite theory, or aristocratic version, what sets the elites apart from the rest of society is their personal resources, such as skills, intelligence and a vested interest in government. This perspective also holds that the much larger balance of society is incompetent and unable to make decisions relating to their governance. The elites, on the other hand, have the resources and motivation to make government work, and will do so because they have the most to lose if government fails.
According to the views of the Italian economist, sociologist and philosopher, Vilfredo Pareto, the elites in a society were capable of the highest accomplishments in their fields because of their intellectual and psychological superiority. He categorized elites into two types: governing elites and non-governing elites.