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Inequality and Sequence of Economic Liberalization and Democratization

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  • Nobuhiro Mizuno

    (Graduate School of Economics, Kyoto University)

Abstract

Some recent empirical studies found positive effects of economic liberalization on democratization. Based on these findings, this paper explains why the sequence of economic liberalization and democratization is related to the effects of the two reforms on economic performance. Since economic liberalization increases the probability of democratization and democratization leads to income redistribution, in an economy with large inequality between the elite and the poor, the elite do not implement economic liberalization, and democratization occurs first. In such an economy, the effects of economic liberalization and democratization are lower because of distortions caused by large-scale income redistribution.

Suggested Citation

  • Nobuhiro Mizuno, 2009. "Inequality and Sequence of Economic Liberalization and Democratization," KIER Working Papers 673, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:673
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP673.pdf
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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