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Politics and Income Inequality: Does Politics Still Matter in New Democracies

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  • Dae Jin Yi

Abstract

Does politics still matter for reducing income inequality in new democracies? The standard explanation is that political institutions, in particular the left government and proportional representation, are negatively associated with income inequality among advanced industrial countries, but there have been so few studies attempting to explain the variation of distributional outcomes across new democracies. This article tests the hypotheses about the effects of political institutions on income inequality with unbalanced pooled time-series cross-sectional data that cover 26 fledgling democracies for 1975-2006. The evidence presented here suggests that, other things being equal, a parliamentary system and PR are substantially more likely to be associated with lower levels of income inequality, but a left government and more years of democracy do not appear to be related to lower income inequality.

Suggested Citation

  • Dae Jin Yi, 2013. "Politics and Income Inequality: Does Politics Still Matter in New Democracies," New Political Economy, Taylor & Francis Journals, vol. 18(5), pages 653-679, October.
    • Handle: RePEc:taf:cnpexx:v:18:y:2013:i:5:p:653-679
    DOI: 10.1080/13563467.2013.736956
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    1. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    2. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    3. Morley, Samuel A., 2001. "The income distribution problem in Latin America and the Caribbean," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2274 edited by Eclac.
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    2. Samuel Adams & Edem Kwame Mensah Klobodu, 2019. "Urbanization, Economic Structure, Political Regime, and Income Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(3), pages 971-995, April.

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