Recessions, Inequality, and Democratization

Paul Maarek and Michael T. Borsch ()
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Michael T. Borsch: University of Cambridge, and IISS (The Hague).
Authors registered in the RePEc Author Service: Michael T. Dorsch

No 2014-19, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper explores the extent to which episodes of democratization can be explained by variation in income inequality. Modern empirical tests of this relationship have generally yielded null results, which we argue follow from the estimation of mis-specified models. Guided by a theoretical nuance of the new economic view of democratization proposed by Acemoglu and Robinson (2001), our empirical examination considers the possibility that the effect of income inequality on democratization may be heterogeneous across the business cycle. Employing fixed effects regressions over a panel of autocratic countries, we demonstrate that variation in income inequality can explain democratization following recessions, but that there is no statistically significant relationship following periods of economic growth.

Keywords: Democratization; distributive conflict; inequality; window of opportunity (search for similar items in EconPapers)
JEL-codes: D72 D74 O15 P16 P48 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-gro and nep-pbe
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2014-19

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