Democratization and the Conditional Dynamics of Income Distribution

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.