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Democracy and income inequality: revisiting the long and short-term relationship

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  • Nikoloski, Zlatko

Abstract

This paper studies the relationship between democracy andincome inequality in long- and short/medium-run. Using appropriate econometrictechniques on both, averaged and panel data for the period 1962-2006, we findno evidence that democracy is associated with tighter income distribution. Ourresults are robust to different specification techniques, to exclusion ofdeveloped as well as the transition countries. We speculate that the different(and opposing) transmission mechanisms, as well as the nature and thedefinition of the democracy variables (both Polity IV and Freedom House)influence our results. Improvement of conceptualization and measurement of democracycould shed further light onto the democracy-inequality nexus.

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  • Nikoloski, Zlatko, 2015. "Democracy and income inequality: revisiting the long and short-term relationship," LSE Research Online Documents on Economics 60562, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:60562
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    1. Tusawar Iftikhar Ahmad & Abdul Rehman & Abid Mehmood & Nosheena Sattar, 2022. "Nexus among Democracy, Human Resource Development, and Income Inequality: Three Stage Least Square Estimation for 47 Developing Economies," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(4), pages 607-620, December.

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    More about this item

    Keywords

    democracy; income inequality; political economy; economic development; developing countries; World;
    All these keywords.

    JEL classification:

    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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