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Investigating the Effect of Democracy and Governance Quality on Income Inequality: Evidence from BRICS

Author

Listed:
  • Iragdao Raja Basumatary

    (Department of Economics, Bodoland University, Kokrajhar, Assam, India)

  • Manjit Das

    (Department of Economics, Bodoland University, Kokrajhar, Assam, India)

Abstract

This paper empirically investigates the influence of democracy and governance quality on income inequality in the rapidly growing emerging BRICS (Brazil, Russia, India, China, and South Africa) countries during the period from 1996-2020. The study employed feasible generalized least squares (FGLS), panel corrected standard errors (PCSE), and the Driscoll-Kraay (DK) standard error estimation method to deal with the problems of autocorrelation, heteroskedasticity, and cross-sectional dependence and to find the effect of democracy and governance quality on income inequality. The results of the study indicate that democracy in BRICS countries exacerbates income inequality, while governance quality helps reduce income inequality. These insights offer valuable implications for decision-makers in crafting policies within these spheres.

Suggested Citation

  • Iragdao Raja Basumatary & Manjit Das, 2024. "Investigating the Effect of Democracy and Governance Quality on Income Inequality: Evidence from BRICS," Economic Research Guardian, Weissberg Publishing, vol. 14(1), pages 16-31, June.
    • Handle: RePEc:wei:journl:v:14:y:2024:i:1:p:16-31
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    More about this item

    Keywords

    Income inequality; Democracy; Governance; FGLS; PCSE; DK;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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