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Title: Democracy, Targeted Redistribution and Ethnic Inequality

Citation Type: Miscellaneous

Publication Year: 2011

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Abstract: This paper examines the empirical relationship between democracy and different forms of inequality. We argue that democracy creates incentives for targeted as opposed to general redistribution; that ethnic groups are often convenient targets for group-based distribution; and thus that democracy should reduced inequality between ethnic groups, but with little effect on overall inequality. Using a new data set from 75 countries, we find support for this argument: there is a strong and robust relationship between democracy and between-group inequality, but no such relationship exists between democracy and (a) overall inequality, (b) within-group inequality or (c) polarization. Two-stage least squares analysis with a new instrument for democracy (one based on regional democracy scores at the time of regime inception), along with an analysis of lagged democracy's effect on between-group inequality, indicates that democracy likely causes lower BGI. The analysis therefore underlines the attractiveness for parties in competitive democracies of group-based distributive politics as opposed to general "rich-to-poor'' transfers that raise the well-being of all low income individuals.

Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1903347

User Submitted?: No

Authors: Huber, John; Ogorzalek, Thomas, K; Gore, Radhika

Publisher: Columbia University

Data Collections: IPUMS International

Topics: Other, Race and Ethnicity

Countries: Canada, Israel, United States