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Growth, income distribution, and democracy: What the data say

Growth, income distribution, and democracy: What the data say This paper investigates the relationship between income distribution, democratic institutions, and growth. It does so by addressing three main issues: the properties and reliability of the income distribution data, the robustness of the reduced form relationships between income distribution and growth estimated so far, and the specific channels through which income distribution affects growth. The main conclusion in this regard is that there is strong empirical support for two types of explanations, linking income distribution to sociopolitical instability and to the education/fertility decision. A third channel, based on the interplay of borrowing constraints and investment in human capital, also seems to receive some support by the data, although it is probably the hardest to test with the existing data. By contrast, there appears to be less empirical support for explanations based on the effects of income distribution on fiscal policy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Growth Springer Journals

Growth, income distribution, and democracy: What the data say

Journal of Economic Growth , Volume 1 (2) – Jun 8, 2004

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References (60)

Publisher
Springer Journals
Copyright
Copyright
Subject
Economics; Economic Growth; Macroeconomics/Monetary Economics//Financial Economics; International Economics
ISSN
1381-4338
eISSN
1573-7020
DOI
10.1007/BF00138861
Publisher site
See Article on Publisher Site

Abstract

This paper investigates the relationship between income distribution, democratic institutions, and growth. It does so by addressing three main issues: the properties and reliability of the income distribution data, the robustness of the reduced form relationships between income distribution and growth estimated so far, and the specific channels through which income distribution affects growth. The main conclusion in this regard is that there is strong empirical support for two types of explanations, linking income distribution to sociopolitical instability and to the education/fertility decision. A third channel, based on the interplay of borrowing constraints and investment in human capital, also seems to receive some support by the data, although it is probably the hardest to test with the existing data. By contrast, there appears to be less empirical support for explanations based on the effects of income distribution on fiscal policy.

Journal

Journal of Economic GrowthSpringer Journals

Published: Jun 8, 2004

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