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Recessions, Inequality, and Democratization

Author

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  • Paul Maarek

    (Université de Cergy-Pontoise, THEMA)

  • Michael T. Borsch

    (University of Cambridge, and IISS (The Hague).)

Abstract

This paper explores the extent to which episodes of democratization can be explained by variation in income inequality. Modern empirical tests of this relationship have generally yielded null results, which we argue follow from the estimation of mis-specified models. Guided by a theoretical nuance of the new economic view of democratization proposed by Acemoglu and Robinson (2001), our empirical examination considers the possibility that the effect of income inequality on democratization may be heterogeneous across the business cycle. Employing fixed effects regressions over a panel of autocratic countries, we demonstrate that variation in income inequality can explain democratization following recessions, but that there is no statistically significant relationship following periods of economic growth.

Suggested Citation

  • Paul Maarek & Michael T. Borsch, 2014. "Recessions, Inequality, and Democratization," THEMA Working Papers 2014-19, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2014-19
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    File URL: http://thema.u-cergy.fr/IMG/documents/2014-19.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dorsch Michael T. & Maarek Paul, 2014. "A Note on Economic Inequality and Democratization," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(4), pages 599-610, December.
    2. Rainer Kotschy & Uwe Sunde, 2021. "Income Shocks, Inequality, and Democracy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 295-326, January.

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    More about this item

    Keywords

    Democratization; distributive conflict; inequality; window of opportunity;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • 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
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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