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Are All Democracies Equally Good? The Role of Interactions between Political Environment and Inequality for Rule of Law

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  • Sunde, Uwe

    (University of Munich)

  • Cervellati, Matteo

    (University of Bologna)

  • Fortunato, Piergiuseppe

    (UNCTAD)

Abstract

Using cross-country data, we find evidence for a significant negative interaction effect between democracy and inequality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with institutions of higher quality when inequality is lower.

Suggested Citation

  • Sunde, Uwe & Cervellati, Matteo & Fortunato, Piergiuseppe, 2007. "Are All Democracies Equally Good? The Role of Interactions between Political Environment and Inequality for Rule of Law," IZA Discussion Papers 2984, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2984
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    References listed on IDEAS

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    More about this item

    Keywords

    democracy; inequality; interactions; rule of law; institutions;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights

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