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Do Middle Classes Bring Institutional Reforms?

Author

Listed:
  • Loayza, Norman

    () (World Bank)

  • Rigolini, Jamele

    () (World Bank)

  • Llorente, Gonzalo

    (World Bank)

Abstract

We revisit the link between poverty, the middle class and institutional outcomes using a newly developed cross-country panel dataset containing detailed information on the distribution of income and expenditures. When the size of the middle class increases (measured as the proportion of people with income above 10 US Dollars a day in PPP terms), social policy on health and education becomes more active and the quality of governance regarding democratic participation and official corruption improves. This does not occur at the expense of economic freedom, as an expansion of the middle class also implies more market-oriented economic policy on trade and finance. The impact of a larger middle class appears to be more robust than those of lower poverty, lower inequality, or higher GDP per capita.

Suggested Citation

  • Loayza, Norman & Rigolini, Jamele & Llorente, Gonzalo, 2012. "Do Middle Classes Bring Institutional Reforms?," IZA Discussion Papers 6430, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6430
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    References listed on IDEAS

    as
    1. Chang, Roberto & Kaltani, Linda & Loayza, Norman V., 2009. "Openness can be good for growth: The role of policy complementarities," Journal of Development Economics, Elsevier, vol. 90(1), pages 33-49, September.
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    9. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Do Middle Classes Bring Institutional Reforms?
      by Maximo Rossi in Wikiprogress América Latina on 2012-04-20 00:24:00

    Citations

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    Cited by:

    1. Tim Krieger & Daniel Meierrieks, 2016. "Does Income Inequality Lead to Terrorism?," CESifo Working Paper Series 5821, CESifo Group Munich.
    2. repec:ilo:ilowps:482296 is not listed on IDEAS
    3. Krieger, Tim & Meierrieks, Daniel, 2016. "Political capitalism: The interaction between income inequality, economic freedom and democracy," European Journal of Political Economy, Elsevier, vol. 45(C), pages 115-132.
    4. Rick Mourits & Luuk Van Kempen, 2016. "How Do the Middle Class and the Poor Grow Apart? An Empirical Test of the Psychological Well-Being Pathway in Middle-Income Countries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 28(5), pages 893-915, November.
    5. Ncube, Mthuli & Shimeles, Abebe, 2013. "The Making of Middle Class in Africa: Evidence from DHS Data," IZA Discussion Papers 7352, Institute for the Study of Labor (IZA).
    6. repec:taf:rsocec:v:75:y:2017:i:1:p:26-48 is not listed on IDEAS
    7. Nancy Birdsall, 2015. "Does the Rise of Middle Class Lock in Good Government in the Developing World?," Working Papers id:7861, eSocialSciences.
    8. Andy Sumner, 2012. "The Buoyant Billions: How “Middle Class” Are the New Middle Classes in Developing Countries? (And Why Does It Matter?)," Working Papers 309, Center for Global Development.
    9. repec:bla:rdevec:v:21:y:2017:i:2:p:404-424 is not listed on IDEAS
    10. Céline Bonnefond & Matthieu Clément & François Combarnous, 2015. "In search of the elusive Chinese urban middle class: an exploratory analysis," Post-Communist Economies, Taylor & Francis Journals, vol. 27(1), pages 41-59, March.
    11. repec:bla:revinw:v:63:y:2017:i:4:p:633-660 is not listed on IDEAS
    12. Andy Sumner, 2012. "Where Will the World’s Poor Live? An Update on Global Poverty and the New Bottom Billion," Working Papers 305, Center for Global Development.
    13. Francisco H.G. Ferreira & Julian Messina & Jamele Rigolini & Luis-Felipe López-Calva & Maria Ana Lugo & Renos Vakis, 2013. "Economic Mobility and the Rise of the Latin American Middle Class
      [La movilidad económica y el crecimiento de la clase media en América Latina]
      ," World Bank Publications, The World Bank, number 11858, November.
    14. Gómez León, María, 2015. "The rise of the middle class : Brazil (1839-1950)," IFCS - Working Papers in Economic History.WH wp15-09, Universidad Carlos III de Madrid. Instituto Figuerola.

    More about this item

    Keywords

    poverty; middle class; income; institutions; development;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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