Does Liberte = Egalite? A Survey of the Empirical Links between Democracy and Inequality with Some Evidence on the Transition Economies

23 Pages Posted: 29 Sep 2004

See all articles by Mark Gradstein

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

Branko Milanovic

World Bank - Development Research Group (DECRG); University of Maryland

Abstract

The effect of the distribution of political rights on income inequality 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 the voting franchise appears to have caused a high degree of economic inequality, and democratization in the form of franchise expansion especially for women, has more often than not led to an expansion in redistribution, at least in the small sample of episodes studied. In a less pronounced way, albeit more emphatically compared to the ambiguous results of the earlier research, the 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

Gradstein, Mark and Milanovic, Branko, Does Liberte = Egalite? A Survey of the Empirical Links between Democracy and Inequality with Some Evidence on the Transition Economies. Available at SSRN: https://ssrn.com/abstract=591517

Mark Gradstein (Contact Author)

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+97 2 8647 2288 (Phone)
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CESifo (Center for Economic Studies and Ifo Institute)

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Centre for Economic Policy Research (CEPR)

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United Kingdom

World Bank - Development Research Group (DECRG)

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Washington, DC 20433
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Branko Milanovic

World Bank - Development Research Group (DECRG) ( email )

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MSN3-311
Washington, DC 20433
United States
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202-522-1153 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/bmilanovic

University of Maryland ( email )

College Park
College Park, MD 20742
United States

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