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Journal of Economic Growth

, Volume 1, Issue 2, pp 149–187 | Cite as

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

  • Roberto Perotti
Article

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.

Keywords

income distribution growth fertility political instability 

JEL classification

O1 H5 

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Copyright information

© Kluwer Academic Publishers 1996

Authors and Affiliations

  • Roberto Perotti
    • 1
  1. 1.Department of EconomicsColumbia UniversityNew YorkUSA

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