Economic Globalization, Domestic Politics, and Income Inequality in the Developed Countries

Mahler, Vincent A.

doi:10.1177/0010414004268849

“…Seshanna and Decornez (2003) note that during the last 40 years the world economy has become wealthier, more globally integrated, but also more unequal and polarized. Mahler (2001) finds little evidence of a systematic relationship between any of the three main modes of economic globalization (trade, FDI and financial openness) and either the distribution of disposable income or earnings of households in developed countries.…”

Section: Different Perspectives On Globalization and Measures To Redumentioning

confidence: 97%

The Relationship between Income Inequality, Poverty and Globalization

Heshmati¹

2007

The Impact of Globalization on the World's Poor

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This paper introduces two composite indices of globalization. The first is based on the Kearney/Foreign Policy magazine and the second is obtained from principal component analysis. They indicate the level of globalization and show how globalization has developed over time for different countries. The indices are composed of four components: economic integration, personal contact, technology and political engagement, each generated from a number of indicators. A breakdown of the index into major components provides possibilities to identify the sources of globalization at the country level and associate it with economic policy measures. The empirical results show that a low rank in the globalization process is due, in addition to involvement in conflicts, to economic and technology factors with limited possibility for the developing countries to affect. The high ranked developed countries share similar patterns in distribution of various components. The indices were also used in a regression analysis to study the causal relationships between income inequality, poverty and globalization. The results show evidence of a weak and negative relationship between globalization and income inequality and poverty.

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“…To test the significance of the estimated coefficients, we estimate the standard errors by not only correcting for heteroskedasticity by using a Huber-White "sandwich" robust estimator, we also cluster the observations by country. Since our data are pooled in unevenly spaced year observations, this clustering technique may be preferred to the simple robust standard errors (see Mahler 2002). In some cases, the clustered standard errors are larger than in the robust case (not reported) and some are smaller.…”

Section: Model and Datamentioning

confidence: 99%

“…A third and more recent paper by Mahler (2002) The remaining recent literature on social spending and inequality, such as papers by Wallerstein (MW) (2001, 2002) and by like minded political scientists and sociologists of an empirical bent, such as Kenworthy and Pontusson (2002), Bradley et al (2001) have several common features. They all purport to test the "median voter" model, e.g., differences being expressed as the difference between the mean and median incomes or voters, but they then use earnings inequality for all earners (not voters alone and not among households) to express this difference.…”

mentioning

confidence: 99%

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Income Distribution and Social Expenditures: A Cross-National Perspective

Schwabish

¹

,

Smeeding

²

,

Osberg

³

2003

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe assemble data from several different sources to examine the cross-national effects of inequality and trust on social expenditures. We find that the inequality between the middle classes and the poor (as measured by the 50/10 percentile ratio) has a small, positive impact in social spending; but inequality between the ends of the distribution and middle class (measured by the 90/50 percentile ratio) has a large and negative impact on social spending. Different measures of trust are shown to have a large and positive impact on spending, implying that more cohesive, trusting societies are more willing to share economic resources with others not so fortunate. Our results suggest that as the "rich" become more distant from the middle and lower classes, they find it easier to opt out of public programs and to buy substitutes for social insurance in the private market. This funding implies that over time rising inequality will erode support for social institutions and social spending that provides insurance against income loss, upward mobility for the disadvantaged, and equality of opportunity for all citizens. . "America's high earners-the fortunate top fifth-thus feel increasingly justified in paying only what is necessary to insure that everyone in their community is sufficiently well educated and has access to the public services they need to succeed" -Reich (1991)Economic inequality, either actual or perceived, plays an important role influencing the set of goods and services that are subsidized by the public sector. Public expenditures on defense, police and fire services, roads, foreign aid, or research and development may (or may not) have benefits for all citizens. However, aside from those directly employed in these activities, such expenditures do not directly affect the well-being of households. In this paper, we focus instead on public expenditures that provide income or goods and services directly tohouseholds. This implies that we are primarily concerned with public expenditure on the provision of "private goods," including cash and near-cash transfers. 1In this paper, we first document the trends in social spending as we have defined it and quickly review that existing literature that links social expenditures and inequality. We then construct and estimate a new model of the empirical relationship between inequality and social expenditures. Our main questions deal with the effects that inequality and trust h...

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“…Barro (2000) and Perera and Lee (2013) focus more strongly on developing countries. Alderson and Nielsen (2002), Mahler (2004) or Acemoglu (1998) emphasize the effect of economic globalization and technical change on inequality.…”

Section: Introductionmentioning

confidence: 99%

Income inequality and oligarchs in Russian regions: A note

Fidrmuc

¹

,

Gundacker

²

2017

European Journal of Political Economy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We trace the rise of the so called oligarchs in post-Soviet Russia and examine their relationship to income distribution in Russia. When Russia moved to a market economy in the 1990s a new business elite evolved. Russia's distinctive path towards market economy, among other factors, gave rise to the oligarchs who now control large parts of the economy and have a strong standing within politics and society. Using a unique regional data set on the locations of oligarchs' businesses across the Russian regions, we test Acemoglu's (2008) proposition that oligarchic societies experience extreme income inequality. Our results show significantly higher levels of income inequality in regions with a higher presence of oligarchs. Terms of use: Documents inJEL-Codes: L220, D430, P250, P310.

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Economic Globalization, Domestic Politics, and Income Inequality in the Developed Countries

Cited by 130 publications

References 37 publications

The Relationship between Income Inequality, Poverty and Globalization

The Relationship between Income Inequality, Poverty and Globalization

Income Distribution and Social Expenditures: A Cross-National Perspective

Income inequality and oligarchs in Russian regions: A note

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