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Are All Democracies Equally Good? The Role of Interactions between Political Environment and Inequality for Rule of Law

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Author Info
Uwe Sunde () (IZA, University of Bonn and CEPR)
Matteo Cervellati () (University of Bologna, IAE Barcelona and IZA)
Piergiuseppe Fortunato () (University of Bologna and United Nations)

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Abstract

Using cross-country data, we find evidence for a significant negative interaction effect between democracy and inequality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with institutions of higher quality when inequality is lower.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2984.

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Length: 10 pages
Date of creation: Aug 2007
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Handle: RePEc:iza:izadps:dp2984

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Related research
Keywords: inequality; democracy; institutions; rule of law; interactions;

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Find related papers by JEL classification:
O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
P48 - Economic Systems - - Other Economic Systems - - - Other Economic Systems: Political Economy; Legal Institutions; Property Rights
P14 - Economic Systems - - Capitalist Systems - - - Property Rights

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dani Rodrik & Romain Wacziarg, 2005. "Do Democratic Transitions Produce Bad Economic Outcomes?," American Economic Review, American Economic Association, vol. 95(2), pages 50-55, May. [Downloadable!]
  2. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Torsten Persson & Guido Tabellini, 2004. "Constitutional Rules and Fiscal Policy Outcomes," American Economic Review, American Economic Association, vol. 94(1), pages 25-45, March. [Downloadable!]
  4. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
    Other versions:
  5. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, 03. [Downloadable!] (restricted)
  6. Rafael La Porta & Florencio Lopez-de-Silanes & Cristian Pop-Eleches & Andrei Shleifer, 2004. "Judicial Checks and Balances," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 445-470, April. [Downloadable!] (restricted)
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  7. Keefer, Philip & Knack, Stephen, 2002. " Polarization, Politics and Property Rights: Links between Inequality and Growth," Public Choice, Springer, vol. 111(1-2), pages 127-54, March. [Downloadable!] (restricted)
    Other versions:
  8. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2005. "Hobbes to Rousseau: Inequality, Institutions, and Development," IZA Discussion Papers 1450, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Easterly, William, 2001. " The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-35, December. [Downloadable!] (restricted)
    Other versions:
  10. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06. [Downloadable!]
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alberto Chong & Mark Gradstein, 2007. "Desigualdad, Democracia, Calidad Institucional y Redistribucion Fiscal," RES Working Papers 4548, Inter-American Development Bank, Research Department. [Downloadable!]
  2. Alberto Chong & Mark Gradstein, 2007. "Inequality, Democracy, Institutional Quality, and Fiscal Redistribution," RES Working Papers 4547, Inter-American Development Bank, Research Department. [Downloadable!]
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