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Most theoretical accounts imply that democratization will reduce income inequality as representative governments become accountable to citizens who would benefit from increased redistribution from the elite. Yet, available empirical evidence does not support the notion that democratization , on average, leads to more equal income distributions. This paper starts from the simple observation that autocracies are quite heterogeneous and govern extreme distributional outcomes (also egalitarian). From extreme initial conditions, democratization may lead income distributions to a " middle ground ". We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using fixed effects and instrumental variable estimates we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing effect in highly unequal autocracies.

Most theoretical accounts imply that democratization will reduce income inequality as representative governments become accountable to citizens who would benefit from increased redistribution from the elite. Yet, available empirical evidence does not support the notion that democratization , on average, leads to more equal income distributions. This paper starts from the simple observation that autocracies are quite heterogeneous and govern extreme distributional outcomes (also egalitarian). From extreme initial conditions, democratization may lead income distributions to a " middle ground ". We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using fixed effects and instrumental variable estimates we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing effect in highly unequal autocracies.

This paper analyses the impact of currency crises on the labour share and identifies two main types of channel: within‐ and across‐sector effects. First crises erode the bargaining power of workers so that within sectors, crises lower the labour share. Nevertheless, structural changes occurring during currency crises may change the aggregate level of the labour share if sectors differ in their capital intensities. We perform estimations on manufacturing sectoral panel data for 20 countries. We conclude that currency crises lower the aggregate manufacturing labour share by around 2 percentage points, and that this decline reflects mostly changes within manufacturing subsectors.

Despite strong theoretical reasons to expect that democratization equalizes income distributions, existing empirical studies do not find a statistically significant effect of democratization on measures of income inequality. This paper starts from the simple observation that autocracies are heterogeneous and govern quite extreme distributional outcomes (also egalitarian). Democratization may drive extreme income distributions to a "middle ground." We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using fixed-effects and instrumental variable regressions, we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing effect in highly unequal autocracies. The effect appears to be driven by changes in gross (market) inequality, suggesting that democratization has led, on average, to redistribution of market opportunities, rather than to direct fiscal redistribution. We then investigate which kinds of (heterogeneous) reforms are at work following democratizations that may rationalize our findings.

AbstractThis brief note revisits the empirical relation between economic inequality and instances of democratization. We argue that economic inequality may be an explanatory factor only following macroeconomic downturns. Our point generalizes – empirical peace scientists examining the likelihood of major political events should consider the possibility that explanatory structural factors may have heterogeneous impacts across macroeconomic cycles.

International audience ; After‐tax income inequality has risen since the mid‐1990s, as increases in market income inequality have not been offset by greater fiscal redistribution. We argue that the substantial increase in the diversity of consumer goods has mitigated mounting political pressures for redistribution. Within a probabilistic voting framework, we demonstrate that if the share of diversified goods in the consumption bundle increases sufficiently with income, then an increase in goods diversity can reduce the political equilibrium tax rate. Focusing on OECD countries, we find empirical support for both the model's micro‐political foundations and the implied relation between goods diversity and fiscal policy outcomes.

International audience ; After‐tax income inequality has risen since the mid‐1990s, as increases in market income inequality have not been offset by greater fiscal redistribution. We argue that the substantial increase in the diversity of consumer goods has mitigated mounting political pressures for redistribution. Within a probabilistic voting framework, we demonstrate that if the share of diversified goods in the consumption bundle increases sufficiently with income, then an increase in goods diversity can reduce the political equilibrium tax rate. Focusing on OECD countries, we find empirical support for both the model's micro‐political foundations and the implied relation between goods diversity and fiscal policy outcomes.

International audience ; After‐tax income inequality has risen since the mid‐1990s, as increases in market income inequality have not been offset by greater fiscal redistribution. We argue that the substantial increase in the diversity of consumer goods has mitigated mounting political pressures for redistribution. Within a probabilistic voting framework, we demonstrate that if the share of diversified goods in the consumption bundle increases sufficiently with income, then an increase in goods diversity can reduce the political equilibrium tax rate. Focusing on OECD countries, we find empirical support for both the model's micro‐political foundations and the implied relation between goods diversity and fiscal policy outcomes.