Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve?

Alberto Chong

No 1905, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: The aim of this paper is to provide comprehensive empirical evidence on recent theories that link democracy and income inequality for the period 1960-1995. In simple cross-country regressions I find a non-monotonic link between these two variables when using ordinary least squares, instrumental variables, and Eusufzai tests. Since these results cannot be taken as "true" time series findings, even though recent theories that explain such a link are, I also employ recent methods applied to dynamic models on panel data. These techniques allow accounting for potential simultaneity and heterogeneity problems. Using the preferred econometric methodology, I also find support for the existence of a political Kuznets curve. Moreover, it appears that income inequality is unconditionally persistent. Results hold for two different democracy proxies and when sensitivity analysis is applied.

Keywords: WP-445 (search for similar items in EconPapers)
Date: 2001-04
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve? (2004)
Working Paper: Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:1905

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