Investigating the Effect of Democracy and Governance Quality on Income Inequality: Evidence from BRICS

Iragdao Raja Basumatary () and Manjit Das ()
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Iragdao Raja Basumatary: Department of Economics, Bodoland University, Kokrajhar, Assam, India
Manjit Das: Department of Economics, Bodoland University, Kokrajhar, Assam, India

Economic Research Guardian, 2024, vol. 14, issue 1, 16-31

Abstract: This paper empirically investigates the influence of democracy and governance quality on income inequality in the rapidly growing emerging BRICS (Brazil, Russia, India, China, and South Africa) countries during the period from 1996-2020. The study employed feasible generalized least squares (FGLS), panel corrected standard errors (PCSE), and the Driscoll-Kraay (DK) standard error estimation method to deal with the problems of autocorrelation, heteroskedasticity, and cross-sectional dependence and to find the effect of democracy and governance quality on income inequality. The results of the study indicate that democracy in BRICS countries exacerbates income inequality, while governance quality helps reduce income inequality. These insights offer valuable implications for decision-makers in crafting policies within these spheres.

Keywords: Income inequality; Democracy; Governance; FGLS; PCSE; DK (search for similar items in EconPapers)
JEL-codes: O15 O17 P16 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:14:y:2024:i:1:p:16-31

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