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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.

Suggested Citation

  • 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), CY Cergy-Paris University, ESSEC and CNRS.
    • Handle: RePEc:ema:worpap:2016-06
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    Cited by:

    1. Gründler, Klaus & Krieger, Tommy, 2022. "Should we care (more) about data aggregation?," European Economic Review, Elsevier, vol. 142(C).
    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. Nobel Prize Committee, 2024. "Scientific Background to the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024," Nobel Prize in Economics documents 2024-2, Nobel Prize Committee.
    5. Sima, Di & Huang, Fali, 2023. "Is democracy good for growth? — Development at political transition time matters," European Journal of Political Economy, Elsevier, vol. 78(C).
    6. Tommy Krieger, 2022. "Democracy and the quality of economic institutions: theory and evidence," Public Choice, Springer, vol. 192(3), pages 357-376, September.
    7. Rédha Chaba & Michael T Dorsch & Victor Hiller & Paul Maarek, 2023. "Demographic and Political Transitions," Working Papers hal-04039762, HAL.
    8. Mergele, Lukas & Hennicke, Moritz & Lubczyk, Moritz, 2025. "The big sell: Privatizing East Germany’s economy," Journal of Public Economics, Elsevier, vol. 242(C).
    9. 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).
    10. Dörffel, Christoph & Freytag, Andreas, 2023. "The poverty effect of democratization," World Development, Elsevier, vol. 165(C).
    11. Deniz, Pinar & Stengos, Thanasis, 2025. "Heterogeneity of institutions and model uncertainty in the income inequality nexus," European Journal of Political Economy, Elsevier, vol. 87(C).
    12. 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.
    13. Bahamonde, Hector & Trasberg, Mart, 2021. "Inclusive institutions, unequal outcomes: Democracy, state capacity, and income inequality," European Journal of Political Economy, Elsevier, vol. 70(C).
    14. Gründler, Klaus & Krieger, Tommy, 2021. "Using machine learning for measuring democracy: An update," ZEW Discussion Papers 21-012, ZEW - Leibniz Centre for European Economic Research.
    15. Toke S. Aidt & Stanley L. Winer & Peng Zhang, 2022. "Franchise extension and fiscal structure in the UK 1820–1913: a new test of the Redistribution Hypothesis," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 16(3), pages 547-574, September.
    16. Wong, Mathew Y.H., 2021. "Democracy, hybrid regimes, and inequality: The divergent effects of contestation and inclusiveness," World Development, Elsevier, vol. 146(C).
    17. 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.
    18. Zaremba, Adam & Kizys, Renatas & Tzouvanas, Panagiotis & Aharon, David Y. & Demir, Ender, 2021. "The quest for multidimensional financial immunity to the COVID-19 pandemic: Evidence from international stock markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 71(C).
    19. Anderson, Edward, 2022. "The correlates of declining income inequality among emerging and developing economies during the 2000s," World Development, Elsevier, vol. 152(C).
    20. Krieger, Tommy, 2022. "Democracy and the quality of economic institutions: Theory and evidence," ZEW Discussion Papers 22-032, ZEW - Leibniz Centre for European Economic Research.
    21. Christoph Doerffel, 2021. "The Poverty Effect of Democratization: Disaggregating Democratic Institutions," Jena Economics Research Papers 2021-018, Friedrich-Schiller-University Jena.
    22. 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.
    23. Krieger, Tommy, 2022. "Measuring democracy," ZEW Discussion Papers 22-063, ZEW - Leibniz Centre for European Economic Research.

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