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Does Libertè = Egalité? A Survey of the Empirical Links between Democracy and Inequality with Some Evidence on the Transition Economies

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  • Mark Gradstein
  • Branko Milanovic

Abstract

The effect of the distribution of political rights on income inequality has been studied both theoretically and empirically. This paper reviews the existing literature and, in particular, the available empirical evidence. Our reading of the literature suggests that formal exclusion from the political process through restrictions on the voting franchise appears to have caused a high degree of economic inequality, and democratization in the form of franchise expansion especially for women, has more often than not led to an expansion in redistribution, at least in the small sample of episodes studied. In a less pronounced way, albeit more emphatically compared to the ambiguous results of the earlier research, the recent evidence indicates an inverse relationship between other measures of democracy, based on civil liberties and political rights, and inequality. The transition experience of the East European countries, however, seems to some extent to go against these conclusions. This, in turn, opens possible new vistas for research, namely the need to incorporate the length of democratic experience and the role played by ideology and social values. Copyright Blackwell Publishers Ltd, 2004.

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  • Mark Gradstein & Branko Milanovic, 2004. "Does Libertè = Egalité? A Survey of the Empirical Links between Democracy and Inequality with Some Evidence on the Transition Economies," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 515-537, September.
  • Handle: RePEc:bla:jecsur:v:18:y:2004:i:4:p:515-537
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