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Inequality and Sequence of Economic Liberalization and Democratization

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  • Nobuhiro Mizuno

    ()
    (Graduate School of Economics, Kyoto University)

Abstract

Some recent empirical studies found positive effects of economic liberalization on democratization. Based on these findings, this paper explains why the sequence of economic liberalization and democratization is related to the effects of the two reforms on economic performance. Since economic liberalization increases the probability of democratization and democratization leads to income redistribution, in an economy with large inequality between the elite and the poor, the elite do not implement economic liberalization, and democratization occurs first. In such an economy, the effects of economic liberalization and democratization are lower because of distortions caused by large-scale income redistribution.

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File URL: http://www.kier.kyoto-u.ac.jp/DP/DP673.pdf
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Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 673.

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Length: 20pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:kyo:wpaper:673

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  1. Papaioannou, Elias & Siourounis, Gregorios, 2008. "Economic and Social Factors Driving the Third Wave of Democratization," CEPR Discussion Papers 6986, C.E.P.R. Discussion Papers.
  2. Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, vol. 83(5), pages 1184-98, December.
  3. J. Ernesto Lopez-Cordova & Christopher M. Meissner, 2005. "The Globalization of Trade and Democracy, 1870-2000," NBER Working Papers 11117, National Bureau of Economic Research, Inc.
  4. repec:cup:cbooks:9780521855266 is not listed on IDEAS
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