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Does inequality harm growth only in democracies? A replication and extension

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  • Knack, Stephen
  • Keefer, Philip

Abstract

We reconstruct a dataset used by Persson and Tabellini (AER, 1994) to test the robustness of their finding that inequality reduces income growth, but only in democracies. We find that their result is highly sensitive to the use of data sources on both democracy and inequality. When we substitute more commonly-used and higher-quality data sources for democracy and inequality, their key result disappears.

Suggested Citation

  • Knack, Stephen & Keefer, Philip, 1996. "Does inequality harm growth only in democracies? A replication and extension," MPRA Paper 25043, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25043
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    File URL: https://mpra.ub.uni-muenchen.de/25043/1/MPRA_paper_25043.pdf
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    References listed on IDEAS

    as
    1. Wang, T. Y. & Dixon, William J. & Muller, Edward N. & Seligson, Mitchell A., 1993. "Inequality and Political Violence Revisited," American Political Science Review, Cambridge University Press, vol. 87(4), pages 979-993, December.
    2. Saint-Paul, Gilles & Verdier, Thierry, 1993. "Education, democracy and growth," Journal of Development Economics, Elsevier, vol. 42(2), pages 399-407, December.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    4. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    5. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    6. Burkhart, Ross E. & Lewis-Beck, Michael S., 1994. "Comparative Democracy: The Economic Development Thesis," American Political Science Review, Cambridge University Press, vol. 88(4), pages 903-910, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    inequality; democracy; growth;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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