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Does Liberté = Egalité? A Survey of the Empirical Evidence on the Links between Political Democracy and Income Inequality

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  • Mark Gradstein
  • Branko Milanovic
Abstract
The relationship between the distribution of political rights and that of economic resources has been studied both theoretically and empirically. This paper reviews the existing literature and, in particular, the available empirical evidence. Our reading of the literature suggests that formal exclusion from the political process through restrictions on voting franchise appears to have caused a high degree of economic inequality, and democratization in the form of franchise expansion has typically led to an expansion in redistribution, at least in the small sample of episodes studied. Similarly, and more emphatically compared to the ambiguous results of the earlier research, more recent evidence indicates an inverse relationship between other measures of democracy, based on civil liberties and political rights, and inequality. The transition experience of the East European countries, however, seems to some extent to go against these conclusions. This, in turn, opens possible new vistas for research, namely the need to incorporate the length of democratic experience and the role played by ideology and social values.

Suggested Citation

  • Mark Gradstein & Branko Milanovic, 2000. "Does Liberté = Egalité? A Survey of the Empirical Evidence on the Links between Political Democracy and Income Inequality," CESifo Working Paper Series 261, CESifo.
    • Handle: RePEc:ces:ceswps:_261
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    2. Checchi, D., 2000. "Does Educational Achievement Help to Explain Income Inequality?," Research Paper 208, World Institute for Development Economics Research.
    3. Maëlan LE GOFF & Christian EBEKE, 2009. "Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others?," Working Papers 200919, CERDI.
    4. Polterovich, Victor & Popov, Vladimir, 2007. "Демократизация И Экономический Рост [Democratization and Economic Growth]," MPRA Paper 23012, University Library of Munich, Germany.
    5. �nal T�ng�r & Adem Y. Elveren, 2015. "Military Expenditures, Income Inequality, Welfare and Political Regimes: A Dynamic Panel Data Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(1), pages 49-74, February.
    6. David Henderson & Robert M McNab & Tamas Rozsas, 2004. "The Hidden Inequality In Socialism," Development and Comp Systems 0411012, University Library of Munich, Germany.
    7. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.
    8. Alberto Chong, 2004. "Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve?," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 189-212, July.
    9. Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2009. "Концентрация Доходов, Нестабильность Демократии И Экономический Рост [Income Concentration, Instability of Democracy and the Economic Growth]," MPRA Paper 27561, University Library of Munich, Germany.
    10. Matteo Cervellati & Piergiuseppe Fortunato & Uwe Sunde, 2008. "Hobbes to Rousseau: Inequality, Institutions and Development," Economic Journal, Royal Economic Society, vol. 118(531), pages 1354-1384, August.
    11. Lambert, Peter J. & Millimet, Daniel L. & Slottje, Daniel, 2003. "Inequality aversion and the natural rate of subjective inequality," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1061-1090, May.
    12. Polterovich, Victor & Popov, Vladimir, 2007. "Democratization, Quality of Institutions and Economic Growth," MPRA Paper 19152, University Library of Munich, Germany.
    13. Unal Tongur & Adem Yavuz Elveren, 2012. "Military Expenditures, Inequality, and Welfare and Political Regimes: A Dynamic Panel Data Analysis," ERC Working Papers 1210, ERC - Economic Research Center, Middle East Technical University, revised Dec 2012.
    14. Boschini, Anne D., 2006. "The political economy of industrialisation," European Journal of Political Economy, Elsevier, vol. 22(4), pages 887-907, December.
    15. Alberto Chong, 2001. "Desigualdad, democracia y persistencia: ¿existe una curva Kuznets política?," Research Department Publications 4254, Inter-American Development Bank, Research Department.
    16. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2013. "Democracy, Redistribution and Inequality," NBER Working Papers 19746, National Bureau of Economic Research, Inc.

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