Exploring the association between economic democracy and income inequality

Andrew Cumbers, Robert McMaster, Susana Cabaço, Michael Vallely and Michael White

Cambridge Journal of Economics, 2026, vol. 50, issue 1, 71-94

Abstract: In this paper, we contribute to ongoing debates about the relationship between economic democracy and inequality. We do this through three novel contributions to the literature. First, we develop an economic democracy index (EDI). Drawing on a range of theoretical approaches, our index broadens the conception of economic democracy beyond the traditional focus on the workplace and employment relations to the economy more broadly and at different scales, across a range of dimensions. Second, the EDI is then applied to OECD member states from 2000 to 2019 to produce a ranking. Third, we then use the index to investigate a potential association (correlation) between economic democracy and income inequality. Our findings suggest that Western European, especially Nordic countries have consistently higher levels of economic democracy than Anglo-American and Eastern European economies and that economies with greater levels of economic democracy have lower levels of income inequality.

Keywords: economic democracy index (EDI); income inequality; Gini coefficient; Pearson correlation; rights (search for similar items in EconPapers)
Date: 2026
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