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When Can the Rabble Redistribute? Democratization and Income Distribution in Low- and Middle-income Countries

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Author Info
Philip Nel () (Department of Political Studies, University of Otago)
Abstract

In contrast to the experience in high-income OECD countries, the introduction of democracy in most low- and middle-income countries (LMICs) has been followed, as a rule, by a concentration of income. Using the median voter hypothesis as analytical tool, this paper explores the conditions under which positive regime change can lead to the mitigation of income inequality in LMICs. Analysis of panel data over the period 1960 to 1999 supports the contention that the degree to which popular sovereignty had been institutionalised through regime change is an important condition. Contrary to mainstream theory, economic openness in general tends to increase and not mitigate income inequality in countries where skilled labour is in short supply. Only in those countries with the requisite state capacity to disseminate skills amongst their populace on a broad scale, the electorate can use the vote effectively to reduce the effects of this tendency.

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Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 43.

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Length: 43 pages
Date of creation: 2006
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Handle: RePEc:inq:inqwps:ecineq2006-43

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Keywords: Income distribution; redistribution; democratisation; median voter hypothesis;

Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
F59 - International Economics - - International Relations and International Political Economy - - - Other
H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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