Life May Be Unfair, But Do Democracies Make It Any Less Burdensome?

38 Pages Posted: 3 Feb 2020

Date Written: January 9, 2020

Abstract

Using a large panel of countries, this paper studies whether, or not, democracies can disproportionately produce better economic outcomes for the poor than non-democracies. To deal with the endogeneity of democracy and inequality, a regional democratisation wave is used to isolate the exogenous variation in country-level democracy. Our main finding is that the exogenous component of democracy significantly and robustly decreased inequality, after controlling for key inequality determinants. We identify that two potential mechanisms through which democracy affects inequality are structural transformation and middle-class bias channels.

Keywords: Democracy, inequality

JEL Classification: P16, O10

Suggested Citation

Oyekola, Olayinka, Life May Be Unfair, But Do Democracies Make It Any Less Burdensome? (January 9, 2020). Available at SSRN: https://ssrn.com/abstract=3516986 or http://dx.doi.org/10.2139/ssrn.3516986

Olayinka Oyekola (Contact Author)

University of Exeter INTO ( email )

Stocker Rd
Exeter, EX4 4PY
United Kingdom

HOME PAGE: http://www.olayinkaoyekola.com

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