Liberty, Equality, Democracy? The supposed relationship between democratic institutions and income inequality

Abstract

The democratic process was always praised for it supposedly reduces inequalities. Indeed, the voice given to citizens in the democratic decision-making process, enables the less favoured part of the population to have the political system addressing their demands. Among them, reducing inequalities inherent to any given system is often to be found in politicians' electoral pledges. The democratisation of an unprecedented number of countries in recent history however, failed to produce expected results in terms of inequality reduction. Indeed, the United Nations find that that globally, income inequality rose steadily in the last two decades, whereas democracy has never been so widespread. This paper thus questions the presupposed existence of the role of democratic institutions on income inequalities reduction. A simple panel regression alone, does not seem to detect such an effect, however. The paper thus turns to possible causes of this insignificance, such as the endogeneity of democracy, and the reverse effect in the extreme cases. The resulting evidences do not provide for a consistent pattern either, it is argued. Hence, as a final specification, the sample is divided into regions with common or close history; regional patterns are uncovered, which suggests that although there is no systematic effect, when in specific conditions, the relationship may exist.

Green Economy and Good Governance Towards Income Equality: A Quantile Analysis

“…Good governance has been identified as an important element in increasing income (Kaufmann et al, 2002) and inequality (Shafique et al, 2006;Abd Elalim, 2020) Robinson (2000) found that income inequality declines when governance effectiveness increases. Chong and Calderon (2000) found good governance is only significant for richer countries, Lambert (2017) found no significant relationship, and Huang and Ho (2018) claimed inequality in income distribution is conditional on the economic, ideological and societal conditions of the nation. Hence, there is ample past literature on income inequality but they are either inconclusive or lack coverage of the relationship between the green economy and governance, which this paper aims to examine.…”

Populism and its impact on the relationship between democracy and liberalism

“…Brazil also experiences extreme income inequality, while China, whose democratic institutions are questionable, faces a much more balanced distribution of income. Given this, it is logical to question whether the notion that "more democracy equals more equality" is correct, or whether there is more than simple causality (Lambert, 2017).…”