Political regimes and inequalities, what is the relationship?
Genoud, Christelle (2020)
Master's Programme in Public Economics and Public Finance
Johtamisen ja talouden tiedekunta - Faculty of Management and Business
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Julkaisun pysyvä osoite on
The relationship between political regimes and inequalities has been studied from both theoretical and empirical perspectives. This paper reviews the existing literature on the subject in order to assess the effects of political regimes on inequalities as well as the effects of inequalities on political regimes. On the one hand, we expect democracy to have a positive relationship with equality; on the other hand, we expect inequalities to have a positive effect on the level of democracy. My reading of the theoretical literature suggests that the results are heterogeneous. I present the mechanisms through which one might expect redistributive effects on incomes in a democracy and accordingly demonstrate that democracy does not necessarily reduce inequalities if it is captured by either interest groups or the middle class. I further present how inequalities drive social unrest, which might force a society to become more democratic, and in what way good economics characteristics lead to a democratic society. Empirical analyses on the linkage also provide inconclusive results about the effects of political regimes on inequalities and the effects of inequalities on political regimes. All things considered, I found different results depending on the sample or methods used.