Impact of Political Regime and Economic Openness on Income Inequality: A Tale of Low-Income and OECD Countries

Archana Pillai

The IUP Journal of Financial Economics, 2011, vol. IX, issue 4, 60-75

Abstract: This paper attempts to study the changing global economic and political environment and assess its impact on fundamentals like income inequality. Scholars have time and again studied the impact of globalization and intensity of the economy. But the integration of the political climate into a comprehensive framework is attempted here. The paper aims to study the process of income inequality in both the OECD and low-income countries within a framework of variables like level of democracy, FDI, trade intensity and growth in GDP per capita. It studies 54 countries for the period 1971-2000, using multiple regression analysis technique, and also checks for robustness and accuracy of the results. The variable of the political regime (level of democracy) is found to be significant. This validates the hypothesis of using the political environment in the studies on globalization or welfare.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjfe:v:09:y:2011:i:4:p:60-75

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