Can income inequality promote democratization?

The aim of this paper is to study the effect of income inequality on the probability of democratization, in a panel of 51 transition countries during the period 1960–2008. Using a conditional fixed‐effect logit estimation, we find robust results suggesting that income inequality (measured by the Gin...

Full description

Saved in:
Bibliographic Details
Published in:Metroeconomica 2020-07, Vol.71 (3), p.510-532
Main Authors: Policardo, Laura, Sanchez Carrera, Edgar J.
Format: Article
Language:English
Subjects:
Autocracy
Democracy
Democratization
Economic analysis
fixed‐effect conditional logit
Income inequality
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The aim of this paper is to study the effect of income inequality on the probability of democratization, in a panel of 51 transition countries during the period 1960–2008. Using a conditional fixed‐effect logit estimation, we find robust results suggesting that income inequality (measured by the Gini index of household’s income inequality) has an inverse—U‐shaped relation with the probability of transition from autarchy to democracy. We show that there is a turning point at a level of household’s income inequality equal to a Gini index of 40. When income inequality is below 40, then probability of transition is positively related to inequality, but when inequality is higher, a subsequent increase in inequality decreases the probability of democratization. This is consistent with Acemoglu and Robinson’s theory that shows how transitions are likeliest at moderate levels of inequality, while autocracy is likelier at the lowest and highest levels of inequality.
ISSN:0026-1386
1467-999X
DOI:10.1111/meca.12287