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Does inequality harm growth only in democracies? A replication and extension

Author

Listed:
  • Knack, Stephen
  • Keefer, Philip

Abstract

We reconstruct a dataset used by Persson and Tabellini (AER, 1994) to test the robustness of their finding that inequality reduces income growth, but only in democracies. We find that their result is highly sensitive to the use of data sources on both democracy and inequality. When we substitute more commonly-used and higher-quality data sources for democracy and inequality, their key result disappears.

Suggested Citation

  • Knack, Stephen & Keefer, Philip, 1996. "Does inequality harm growth only in democracies? A replication and extension," MPRA Paper 25043, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25043
    as

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    File URL: https://mpra.ub.uni-muenchen.de/25043/1/MPRA_paper_25043.pdf
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    References listed on IDEAS

    as
    1. repec:cup:apsrev:v:87:y:1993:i:04:p:979-993_10 is not listed on IDEAS
    2. Saint-Paul, Gilles & Verdier, Thierry, 1993. "Education, democracy and growth," Journal of Development Economics, Elsevier, vol. 42(2), pages 399-407, December.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    4. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    5. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    6. repec:cup:apsrev:v:88:y:1994:i:04:p:903-910_09 is not listed on IDEAS
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    More about this item

    Keywords

    inequality; democracy; growth;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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