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An economic or political Kuznets curve?

Abstract

This paper examines two closely related empirical hypotheses: an economic Kuznets curve and a political Kuznets curve. We find a robust inverted-U relationship between income inequality and political development, but not one between income inequality and economic development. Exploring the cross-section aspect of the panel data, we find that the economic Kuznets curve is sensitive to different control specifications and to different functional specifications, but the political Kuznets curve is robust. Using dynamic panel data estimation, we find that the economic Kuznets curve does not hold up intertemporally while the political Kuznets curve does.

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Correspondence to Henry Tam.

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Tam, H. An economic or political Kuznets curve?. Public Choice 134, 367–389 (2008). https://doi.org/10.1007/s11127-007-9232-3

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Keywords

  • Kuznets curve
  • Inequality
  • Democratization
  • Economic development
  • Panel data