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Does Liberté = Egalité? A Survey of the Empirical Evidence on the Links between Political Democracy and Income Inequality

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  • Mark Gradstein
  • Branko Milanovic

Abstract

The relationship between the distribution of political rights and that of economic resources has been studied both theoretically and empirically. This paper reviews the existing literature and, in particular, the available empirical evidence.Our reading of the literature suggests that formal exclusion from the political process through restrictions on voting franchise appears to have caused a high degree of economic inequality, and democratization in the form of franchise expansion has typically led to an expansion in redistribution, at least in the small sample of episodes studied. Similarly, and more emphatically compared to the ambiguous results of the earlier research, more recent evidence indicates an inverse relationship between other measures of democracy, based on civil liberties and political rights, and inequality. The transition experience of the East European countries, however, seems to some extent to go against these conclusions. This, in turn, opens possible new vistas for research, namely the need to incorporate the length of democratic experience and the role played by ideology and social values.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 261.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_261

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Keywords: Democracy; freedom; inequality; redistribution;

References

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  1. Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 73, China Economics and Management Academy, Central University of Finance and Economics.
  2. Alesina, Alberto & Perotti, Roberto, 1994. "The Political Economy of Growth: A Critical Survey of the Recent Literature," World Bank Economic Review, World Bank Group, World Bank Group, vol. 8(3), pages 351-71, September.
  3. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, American Economic Association, vol. 91(4), pages 938-963, September.
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  9. Saint-Paul, G. & Verdier, T., 1991. "Education, Democracy and growth," DELTA Working Papers, DELTA (Ecole normale supérieure) 91-27, DELTA (Ecole normale supérieure).
  10. Acemoglu, Daron & Robinson, James A, 1998. "Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1797, C.E.P.R. Discussion Papers.
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  12. Bassett, William F. & Burkett, John P. & Putterman, Louis, 1999. "Income distribution, government transfers, and the problem of unequal influence," European Journal of Political Economy, Elsevier, Elsevier, vol. 15(2), pages 207-228, June.
  13. Milanovic, Branko, 1999. "Do more unequal countries redistribute more? does the median voter hypothesis hold?," Policy Research Working Paper Series 2264, The World Bank.
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  17. Abrams, Burton A & Settle, Russell F, 1999. " Women's Suffrage and the Growth of the Welfare State," Public Choice, Springer, Springer, vol. 100(3-4), pages 289-300, September.
  18. John R. Lott & Jr. & Lawrence W. Kenny, 1999. "Did Women's Suffrage Change the Size and Scope of Government?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(6), pages 1163-1198, December.
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  22. Redor,Dominique, 2010. "Wage Inequalities in East and West," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521134149.
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Citations

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Cited by:
  1. Alberto Chong, 2001. "Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve?," Research Department Publications, Inter-American Development Bank, Research Department 4253, Inter-American Development Bank, Research Department.
  2. Polterovich, Victor & Popov, Vladimir, 2007. "Democratization, Quality of Institutions and Economic Growth," MPRA Paper 19152, University Library of Munich, Germany.
  3. Checchi, D., 2000. "Does Educational Achievement Help to Explain Income Inequality?," Research Paper, World Institute for Development Economics Research 208, World Institute for Development Economics Research.
  4. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2009. "Концентрация Доходов, Нестабильность Демократии И Экономический Рост
    [Income Concentration, Instability of Democracy and the Economic Gr
    ," MPRA Paper 27561, University Library of Munich, Germany.
  5. Alberto Chong, 2001. "Desigualdad, democracia y persistencia: ¿existe una curva Kuznets política?," Research Department Publications, Inter-American Development Bank, Research Department 4254, Inter-American Development Bank, Research Department.
  6. Amir-ud-Din, Rafi & Rashid, Abdul & Ahmad, Shabbir, 2008. "Democracy, Inequality and Economic Development: The Case of Pakistan," MPRA Paper 26935, University Library of Munich, Germany.
  7. Polterovich, Victor & Popov, Vladimir, 2007. "Демократизация И Экономический Рост
    [Democratization and Economic Growth]
    ," MPRA Paper 23012, University Library of Munich, Germany.
  8. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers, Free University Berlin, Jean Monnet Centre of Excellence wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.
  9. David Henderson & Robert M McNab & Tamas Rozsas, 2004. "The Hidden Inequality In Socialism," Development and Comp Systems 0411012, EconWPA.

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