Концентрация Доходов, Нестабильность Демократии И Экономический Рост
[Income Concentration, Instability of Democracy and the Economic Growth]
AbstractIn our previous papers (Polterovich V., Popov V., 2007; Polterovich V., Popov V., Tonis A., 2006) it was shown that democratization (increase in the political rights index of the Freedom house in 1970-2000) can negatively affect economic growth, if the quality of institutions at the beginning of the period is low; several mechanisms of such an impact were analyzed. In this paper we offer the brief review of previous results and examine another possible mechanism, which is associated with the unevenness in income distribution. Our empirical (econometric) research demonstrates that under weak institutions both democratization and resource wealth are associated with greater income inequality, which in turn reduces the stability of democratic regimes and increases the chances of return to authoritarianism. The instability of democracy also leads to the deterioration of institutions and suppresses economic growth. These empirical results are being explained in the framework of a game theoretic model that demonstrates instability of democracy under poor institutions and high income inequality.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27561.
Date of creation: 2009
Date of revision:
Publication status: Published in Economics and Mathematical Methods 1.45(2009): pp. 15-29
income concentration; democracy; autocracy; elections; political stability; economic growth;
Find related papers by JEL classification:
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
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