Democracy and income inequality: revisiting the long- and short-term relationship

Zlatko Nikoloski

Review of Economics and Institutions, 2015, vol. 6, issue 2

Abstract: This paper studies the relationship between democracy andincome inequality in long- and short/medium-run. Using appropriate econometrictechniques on both, averaged and panel data for the period 1962-2006, we findno evidence that democracy is associated with tighter income distribution. Ourresults are robust to different specification techniques, to exclusion ofdeveloped as well as the transition countries. We speculate that the different(and opposing) transmission mechanisms, as well as the nature and thedefinition of the democracy variables (both Polity IV and Freedom House)influence our results. Improvement of conceptualization and measurement of democracycould shed further light onto the democracy-inequality nexus.

Keywords: democracy; income inequality; political economy; economic development; developing countries; World (search for similar items in EconPapers)
JEL-codes: F54 F63 O15 O43 O47 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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