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Inequality Undermines Democracy and Growth

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  • Thorvaldur Gylfason

Abstract

Income equality and trust seem to go along with several other ingredients of social capital as determinants of economic growth across the globe. In a large sample of countries, equality in the distribution of income as measured by the World Bank and by The Standardized World Income Inequality Database are seen to be correlated with economic diversification, the rule of law, transparency as measured by the corruption perceptions index from Transparency International, trust as measured in the World Values Survey, and democracy, all of which are good for growth as reflected in the purchasing power of per capita national income.

Suggested Citation

  • Thorvaldur Gylfason, 2019. "Inequality Undermines Democracy and Growth," CESifo Working Paper Series 7486, CESifo.
  • Handle: RePEc:ces:ceswps:_7486
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    References listed on IDEAS

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    1. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    inequality; social capital; democracy; growth;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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