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Democratization and the Conditional Dynamics of Income Distribution

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  • Michael T. Dorsch
  • Paul Maarek

    (Université de Cergy-Pontoise, THEMA)

Abstract

Most theoretical accounts imply that democratization will reduce income inequality as representative governments become accountable to citizens who would bene t from increased redistribution from the elite. Yet, available empirical evidence does not support the notion that democratization, on average, leads to more equal income distributions. This paper starts from the simple observation that autocracies are quite heterogeneous and govern extreme distributional outcomes (also egalitarian). From extreme initial conditions, democratization may lead income distributions to a "middle ground". We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using xed e ects and instrumental variable estimates we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing e ect in highly unequal autocracies.

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  • Michael T. Dorsch & Paul Maarek, 2016. "Democratization and the Conditional Dynamics of Income Distribution," THEMA Working Papers 2016-06, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  • Handle: RePEc:ema:worpap:2016-06
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    6. Hennicke, Moritz & Lubczyk, Moritz & Mergele, Lukas, 2020. "The big sell: Privatizing East Germany's economy," ZEW Discussion Papers 20-043, ZEW - Leibniz Centre for European Economic Research.
    7. Gründler, Klaus & Krieger, Tommy, 2021. "Using Machine Learning for measuring democracy: A practitioners guide and a new updated dataset for 186 countries from 1919 to 2019," European Journal of Political Economy, Elsevier, vol. 70(C).
    8. Christoph Doerffel, 2021. "The Poverty Effect of Democratization: Disaggregating Democratic Institutions," Jena Economic Research Papers 2021-018, Friedrich-Schiller-University Jena.
    9. Christoph Doerffel & Andreas Freytag, 2021. "The Poverty Effect of Democratization," Jena Economic Research Papers 2021-017, Friedrich-Schiller-University Jena.
    10. Valentin Lang, 2021. "The economics of the democratic deficit: The effect of IMF programs on inequality," The Review of International Organizations, Springer, vol. 16(3), pages 599-623, July.
    11. Berggren, Niclas & Bjørnskov, Christian, 2020. "Corruption, judicial accountability and inequality: Unfair procedures may benefit the worst-off," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 341-354.
    12. Bahamonde, Hector & Trasberg, Mart, 2021. "Inclusive institutions, unequal outcomes: Democracy, state capacity, and income inequality," European Journal of Political Economy, Elsevier, vol. 70(C).
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    14. Wong, Mathew Y.H., 2021. "Democracy, hybrid regimes, and inequality: The divergent effects of contestation and inclusiveness," World Development, Elsevier, vol. 146(C).

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