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Концентрация Доходов, Нестабильность Демократии И Экономический Рост
[Income Concentration, Instability of Democracy and the Economic Growth]

Author

Listed:
  • Polterovich, Victor
  • Popov, Vladimir
  • Tonis, Alexander

Abstract

In our previous papers (Polterovich V., Popov V., 2007; Polterovich V., Popov V., Tonis A., 2006) it was shown that democratization (increase in the political rights index of the Freedom house in 1970-2000) can negatively affect economic growth, if the quality of institutions at the beginning of the period is low; several mechanisms of such an impact were analyzed. In this paper we offer the brief review of previous results and examine another possible mechanism, which is associated with the unevenness in income distribution. Our empirical (econometric) research demonstrates that under weak institutions both democratization and resource wealth are associated with greater income inequality, which in turn reduces the stability of democratic regimes and increases the chances of return to authoritarianism. The instability of democracy also leads to the deterioration of institutions and suppresses economic growth. These empirical results are being explained in the framework of a game theoretic model that demonstrates instability of democracy under poor institutions and high income inequality.

Suggested Citation

  • Polterovich, Victor & Popov, Vladimir & Tonis, Alexander, 2009. "Концентрация Доходов, Нестабильность Демократии И Экономический Рост [Income Concentration, Instability of Democracy and the Economic Growth]," MPRA Paper 27561, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:27561
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    References listed on IDEAS

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    Cited by:

    1. Bozhechkova, Alexandra Viktorovna & Vashelyuk, Natalia. & Nazarov, P.A. & Perevyshin, Yuri & Tumanova, Elena Alexandrovna & Shagas, Natalia, 2015. "Modeling the Effects of Economic Policy and Changes in the Behavior of Economic Agents," Published Papers 2311, Russian Presidential Academy of National Economy and Public Administration.

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    More about this item

    Keywords

    income concentration; democracy; autocracy; elections; political stability; economic growth;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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