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Democratization and the conditional dynamics of income distribution

Author

Listed:
  • Michael Dorsch

    (CEU - Central European University [Budapest, Hongrie])

  • Paul Maarek

    (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)

Abstract
Most theoretical accounts imply that democratization will reduce income inequality as representative governments become accountable to citizens who would benefit from increased redistribution from the elite. Yet, available empirical evidence does not support the notion that democratization , on average, leads to more equal income distributions. This paper starts from the simple observation that autocracies are quite heterogeneous and govern extreme distributional outcomes (also egalitarian). From extreme initial conditions, democratization may lead income distributions to a " middle ground ". We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using fixed effects and instrumental variable estimates we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing effect in highly unequal autocracies.

Suggested Citation

  • Michael Dorsch & Paul Maarek, 2016. "Democratization and the conditional dynamics of income distribution," Working Papers hal-01350968, HAL.
    • Handle: RePEc:hal:wpaper:hal-01350968
    Note: View the original document on HAL open archive server: https://hal.science/hal-01350968
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    References listed on IDEAS

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    6. Lukas Mergele & Moritz Hennicke & Moritz Lubczyk, 2020. "The Big Sell: Privatizing East Germany's Economy," CESifo Working Paper Series 8566, CESifo.
    7. Gründler, Klaus & Krieger, Tommy, 2022. "Should we care (more) about data aggregation?," European Economic Review, Elsevier, vol. 142(C).
    8. Bahamonde, Hector & Trasberg, Mart, 2021. "Inclusive institutions, unequal outcomes: Democracy, state capacity, and income inequality," European Journal of Political Economy, Elsevier, vol. 70(C).
    9. Tommy Krieger, 2022. "Democracy and the quality of economic institutions: theory and evidence," Public Choice, Springer, vol. 192(3), pages 357-376, September.
    10. Klaus Gründler & Tommy Krieger, 2021. "Using Machine Learning for Measuring Democracy: An Update," CESifo Working Paper Series 8903, CESifo.
    11. Anderson, Edward, 2022. "The correlates of declining income inequality among emerging and developing economies during the 2000s," World Development, Elsevier, vol. 152(C).
    12. Toke S. Aidt & Stanley L. Winer & Peng Zhang, 2022. "Franchise extension and fiscal structure in the UK 1820–1913: a new test of the Redistribution Hypothesis," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 16(3), pages 547-574, September.
    13. Dorsch, Michael T. & Maarek, Paul, 2020. "Economic downturns, inequality, and democratic improvements," European Journal of Political Economy, Elsevier, vol. 62(C).
    14. Zaremba, Adam & Kizys, Renatas & Tzouvanas, Panagiotis & Aharon, David Y. & Demir, Ender, 2021. "The quest for multidimensional financial immunity to the COVID-19 pandemic: Evidence from international stock markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 71(C).
    15. Krieger, Tommy, 2019. "Democracy and institutional quality: Theory and Evidence," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203507, Verein für Socialpolitik / German Economic Association.
    16. Krieger, Tommy, 2022. "Democracy and the quality of economic institutions: Theory and evidence," ZEW Discussion Papers 22-032, ZEW - Leibniz Centre for European Economic Research.
    17. Rédha Chaba & Michael T Dorsch & Victor Hiller & Paul Maarek, 2023. "Demographic and Political Transitions," Working Papers hal-04039762, HAL.
    18. Gründler, Klaus & Krieger, Tommy, 2021. "Using Machine Learning for measuring democracy: A practitioners guide and a new updated dataset for 186 countries from 1919 to 2019," European Journal of Political Economy, Elsevier, vol. 70(C).
    19. Wong, Mathew Y.H., 2021. "Democracy, hybrid regimes, and inequality: The divergent effects of contestation and inclusiveness," World Development, Elsevier, vol. 146(C).
    20. Christoph Doerffel, 2021. "The Poverty Effect of Democratization: Disaggregating Democratic Institutions," Jena Economics Research Papers 2021-018, Friedrich-Schiller-University Jena.
    21. Krieger, Tommy, 2022. "Measuring democracy," ZEW Discussion Papers 22-063, ZEW - Leibniz Centre for European Economic Research.

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