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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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    Cited by:

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    2. Klaus Gründler & Niklas Potrafke & Timo Wochner, 2020. "Structural Reforms and Income Inequality: Who Benefits from Market-Oriented Reforms?," CESifo Working Paper Series 8042, CESifo.
    3. Dorsch, Michael T. & Maarek, Paul, 2020. "Economic downturns, inequality, and democratic improvements," European Journal of Political Economy, Elsevier, vol. 62(C).
    4. 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.
    5. Lukas Mergele & Moritz Hennicke & Moritz Lubczyk, 2020. "The Big Sell: Privatizing East Germany's Economy," CESifo Working Paper Series 8566, CESifo.
    6. Klaus Gründler & Tommy Krieger, 2021. "Using Machine Learning for Measuring Democracy: An Update," CESifo Working Paper Series 8903, CESifo.
    7. Krieger, Tommy, 2019. "Democracy and institutional quality: Theory and Evidence," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203507, Verein für Socialpolitik / German Economic Association.

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