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Does Clientelism Affect Income Inequality? Evidence from Panel Data

Author

Listed:
  • Ebney Ayaj Rana

    (Department of Development Studies, University of Dhaka, Bangladesh and Andrew Young School of Policy Studies, Georgia State University, USA)

  • Mustafa Kamal

    (Economic Policy Unit, Unnayan Onneshan, Bangladesh)

Abstract

This paper studies the determinants of income inequality in a panel of countries to give empirical evidence on the relationship between income inequality and clientelism, a relationship in which a person (or patron) provides one’s own resources or the resources he or she controls to persons with inferior positions (or clients) in return for their loyalty and service. Using different panel data techniques, especially group mean fully modified OLS estimator, and also allowing for control variables, cross-sectional heterogeneity and cross-sectional dependence, we find that in the long run, clientelism exerts a significant negative effect on income equality. The overall results of the study have implications for fiscal management strategies and political regime choice.

Suggested Citation

  • Ebney Ayaj Rana & Mustafa Kamal, 2018. "Does Clientelism Affect Income Inequality? Evidence from Panel Data," Journal of Income Distribution, Ad libros publications inc., vol. 26(1), pages 1-24, March.
  • Handle: RePEc:jid:journl:y:2018:v:26:i:1:p:1-24
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    More about this item

    Keywords

    clientelism; governance; government expenditure; income inequality; group-mean fully modified OLS estimator;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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