Advertisement

Studies in Comparative International Development

, Volume 51, Issue 4, pp 503–529 | Cite as

Inequality, Economic Development, and Democratization

  • Christian Houle
Article

Abstract

Although multiple theories suggest that economic development and inequality somehow affect democratization, these claims have received only limited empirical support. I contend that much of the confusion stems from the implicit assumption held by the literature that development and inequality affect democratization independently of one another. In this paper, I argue that the effect of income distribution on democratization is in fact contingent on the income level: in middle-income countries inequality fosters democratization; in rich countries, however, it harms democratization. Using a data set covering almost all autocracies between 1960 and 2007, I find evidence consistent with my hypothesis.

Keywords

Inequality Economic development Democratization 

Notes

Acknowledgments

Winner of the 2011 Kellogg/Notre Dame Award for best paper in comparative politics presented at the MPSA convention. Earlier versions of this paper were presented at the Annual Meeting of the Midwest Political Science Association, Chicago, at the Annual Meeting of the International Political Economy Society, College Station TX, and at the Comparative Politics Workshop, University of Rochester. I gratefully acknowledge comments and suggestions from Alexandre Debs, Mark Fey, Jennifer Gandhi, Gretchen Helmke, Timothy Hicks, Tasos Kalandrakis, Mark A. Kayser, Jeremy Kedziora, G. Bingham Powell, Curtis Signorino, Randall Stone, Olesya Tkacheva, Jay Ulfelder, Milan Svolik and Jeffrey Weber. I am also grateful to Jonathan Hanson and Rachel Sigman, and Hillel Soifer for sharing data. I would also like thank Jessica Fortin for discussions on different measures of state capacity. All errors are mine.

Supplementary material

12116_2016_9220_MOESM1_ESM.pdf (831 kb)
(PDF 830 KB)

References

  1. Acemoglu D, Robinson JA. Economic origins of dictatorship and democracy. New York: Cambridge University Press; 2006.Google Scholar
  2. Acemoglu D, Johnson S, Robinson JA, Yared P. Income and democracy. Amer Econ Rev. 2008;98(3):808–42.CrossRefGoogle Scholar
  3. Ahlquist JS, Wibbels E. Riding the wave: world trade and factor-based models of democratization. Amer J Polit Sci. 2012;56(2):447–64.CrossRefGoogle Scholar
  4. Ai C, Norton E. Interaction terms in logit and probit models. Econ Lett. 2003;80:123–9.CrossRefGoogle Scholar
  5. Albertus M, Menaldo V. Coercive capacity and the prospects for democratization. Compar Polit. 2012;44(2):151–69.CrossRefGoogle Scholar
  6. Ansell B, Samuels D. Inequality and democratization: a contractarian approach. Comp. Polit Stud. 2010;20(10):1–32.Google Scholar
  7. Ansell B, Samuels D. Rethinking inequality and democratization: how inequality divides elites and underpins regime change. APSA-Comp. Democrat Newslett. 2013;11(3):8–11.Google Scholar
  8. Ansell B, Samuels D. Inequality and democratization: an elite-competition approach. Cambridge: Cambridge University Press; 2014.CrossRefGoogle Scholar
  9. Bellin E. The robustness of authoritarianism in the Middle East. Comp. Polit. 2004;36:139–57.CrossRefGoogle Scholar
  10. Besley T, Persson T. The causes and consequences of development clusters: state capacity, peace, and income. Ann Rev Econ. 2014;6:927–49.CrossRefGoogle Scholar
  11. Blundell R, Bond S. Initial conditions and moment restrictions in dynamic panel data models. J Economet. 1998;87:115–43.CrossRefGoogle Scholar
  12. Boix C. Democracy and redistribution. Cambridge: Cambridge University Press; 2003.CrossRefGoogle Scholar
  13. Boix C. RMDs. APSA-Comp. Democrat Newslett. 2013;11(3):12–5.Google Scholar
  14. Boix C, Miller MK, Rosato S. A complete data set of political regimes, 1800-2007. Comparative Polit Stud. 2013;46(12):1523–54.CrossRefGoogle Scholar
  15. Boix C, Stokes SC. Endogenous democratization. World Polit. 2003;55(4): 517–49.CrossRefGoogle Scholar
  16. Bollen KA, Jackman RW. Political democracy and the size distribution of income. Amer Sociologic Rev. 1985;50(4):438–57.CrossRefGoogle Scholar
  17. Brambor T, Clark WR, Golder M. Understanding interaction models: improving empirical analyses. Polit Anal. 2006;14:63–82.CrossRefGoogle Scholar
  18. Buhaug H. Relative capability and rebel objective in Civil War. J Peace Res. 2006;43(6):691–708.CrossRefGoogle Scholar
  19. Buhaug H. Dude, where’s my conflict? LSG, relative strength, and the location of Civil War. Conflict Manag Peace Sci. 2010;27(2):107–28.CrossRefGoogle Scholar
  20. Burkhart RE. Comparative democracy and income distribution: shape and direction of the causal arrow. J Polit. 1997;59(1):148–64.CrossRefGoogle Scholar
  21. Calhoun C. The Question Of Class Struggle. Chicago: University of Chicago Press; 1982.Google Scholar
  22. Cheibub J, Gandhi J, Vreeland J. Democracy and dictatorship revisited. Public Choice. 2010;143(1–2):67–101.CrossRefGoogle Scholar
  23. Dahl RA. Polyarchy, participation and opposition. New Haven: Yale University Press; 1971.Google Scholar
  24. Deininger K, Squire L. A new data set measuring income inequality. World Bank Econ Rev. 1996;10(3):565–91.CrossRefGoogle Scholar
  25. Dunning T. Crude democracy: natural resource wealth and political regimes. Cambridge: Cambridge University Press; 2008.CrossRefGoogle Scholar
  26. Fearon JD, Laitin DD. Ethnicity, insurgency and Civil War. Amer Polit Sci Rev. 2003;97(1):75–90.CrossRefGoogle Scholar
  27. Feierabend ID, Feierabend RL, Nesvold BA. Social change and political violence: cross-national patterns. Violence in America: historical and comparative perspectives. In: Graham HD and Gurr TR, editors. New York: Signet; 1969.Google Scholar
  28. Fortin-Rittberger J. Exploring the relationship between infrastructural and coercive state capacity. Democratization. 2014;21(7):1–21.CrossRefGoogle Scholar
  29. Freeman JR, Quinn DP. The economic origins of democracy reconsidered. Amer Politi Sci Rev. 2012;106:58–80.CrossRefGoogle Scholar
  30. Galbraith JK. Inequality and instability: a study of the world economy just before the great crisis. New York: Oxford University Press; 2012.CrossRefGoogle Scholar
  31. Gibler D, Miller S. External territorial threat, state capacity, and Civil War. J Peace Res. 2014;51(5):634–46.CrossRefGoogle Scholar
  32. Gould W, Pitblado JS, Sribney W. 2006. Maximum likelihood estimation with stata. Stata Press.Google Scholar
  33. Haber S, Menaldo V. Do natural resources fuel authoritarianism? A reappraisal of the resource curse. Amer Polit Sci Rev. 2011;105(1):1–26.CrossRefGoogle Scholar
  34. Haas A, Stack S. Economic development and strikes: a comparative analysis. Sociol Q. 1983;24(1):43–58.CrossRefGoogle Scholar
  35. Haggard S, Kaufman RR. Inequality and regime change: democratic transitions and the stability of democratic rule. Amer Polit Sci Rev. 2012;106:495–516.CrossRefGoogle Scholar
  36. Haggard S, Kaufman RR, Teo T. 2012. Distributive conflict and regime change. A qualitative data set. (accessed October 2012).Google Scholar
  37. Haggard S, Kaufman RR, Teo T. Inequality and regime change: the role of distributive conflict. APSA-Comp Democrat Newslett. 2013;11(3):4–7.Google Scholar
  38. Hanson J. Democracy and state capacity: complements or substitutes? Stud Comp Int Develop. 2015;50:304–30.CrossRefGoogle Scholar
  39. Hanson J, Sigman Rl. Leviathan’s latent dimensions: measuring state capacity for comparative political research. Unpublished Manuscript: University of Michigan, and Syracruse University; 2013.Google Scholar
  40. Heid B, Langer J, Larch M. Income and democracy: evidence from system GMM estimates. Econ Lett. 2012;116(2):166–9.CrossRefGoogle Scholar
  41. Hendrix CS. Measuring state capacity: theoretical and empirical implications for the study of civil conflict. J Peace Res. 2010;47(3):273–85.CrossRefGoogle Scholar
  42. Houle C. Inequality and democracy: why inequality harms consolidation but does not affect democratization. World Polit. 2009;61(4):589–622.CrossRefGoogle Scholar
  43. Houle C. Inequality, democratization and democratic consolidation 2013. APSA-Comp Democrat Newslett. 2013;11(3):21–24.Google Scholar
  44. Houle C. Does inequality harm economic development and democracy? Accounting for mssing values, non-comparable observations and endogeneity. The Oxford handbook of the politics of international development. In: Lancaster C and van de Walle N, editors. Oxford: Oxford University Press; Forthcoming.Google Scholar
  45. Huntington S. Political order in changing societies. New Haven and London: Yale University Press; 1968.Google Scholar
  46. Huntington S. The third wave: democratization in the late twentieth century. Norman: University of Oklahoma Press; 1991.Google Scholar
  47. Inglehart R, Welzel C. 2009. How development leads to democracy? What we know about modernization. Foreign affairs. March/April.Google Scholar
  48. Kennedy R. The contradiction of modernization: a conditional model of endogenous democratization. J Polit. 2010;72(03):785–98.CrossRefGoogle Scholar
  49. Lieberman E. Taxation data as indicators of state-society relations: possibilities and pitfalls in cross-national research. Stud Comp Int Develop. 2002;36(4):89–115.CrossRefGoogle Scholar
  50. Lipset SM. Some social requisites of democracy: economic development and political legitimacy. Amer Polit Sci Rev. 1959;53(1):69–105.CrossRefGoogle Scholar
  51. Meltzer AH, Richard SF. A rational theory of the size of government. J Polit Econ. 1981;89(5):914–27.CrossRefGoogle Scholar
  52. Midlarsky MI. The origins of democracy in agrarian society: land inequality and political rights. J Conflict Resol. 1992;36(3):454–77.CrossRefGoogle Scholar
  53. Miller MK. Economic development, violent leader removal, and democratization. Amer J Polit Sci. 2012;56(4):1002–20.CrossRefGoogle Scholar
  54. Muller EN. Democracy, economic development, and income inequality. Amer Sociol Rev. 1988;53(1):50–68.CrossRefGoogle Scholar
  55. Muller EN. Economic determinants of democracy. Amer Sociol Rev. 1995;60(6): 966–82.CrossRefGoogle Scholar
  56. Ortega D, Rodriguez F. 2006. Are capital shares higher in poor countries? Evidence from industrial surveys. Unpublished Manuscript, Corporacin Andina de Fomento (CAF) and IESA, and Wesleyan University.Google Scholar
  57. Center for International Comparisons of Production, Income and Prices. ND. Penn World Tables. Available from https://pwt.sas.upenn.edu/, access October, 2012.
  58. Papaionannou E, Siourounis G. 2005. Economic and Social Factors Driving the Third Wave of Democratization. Manuscript, London Business School.Google Scholar
  59. Przeworski A. Self-enforcing democracy. The Oxford handbook of political economy. In: Weingast BR and Wittman DA, editors. Oxford: Oxford University Press; 2006.Google Scholar
  60. Przeworski A, Alvarez ME, Cheibub JA, Limongi F. Democracy and development. Cambridge: Cambridge University Press; 2000.CrossRefGoogle Scholar
  61. Reenock C, Bernhard M, Sobek D. Regressive socioeconomic distribution and democratic survival. Int Stud Q. 2007;51(3):677–99.CrossRefGoogle Scholar
  62. Rodrik D. Democracies pay higher wages. Q J Econ. 1999;114(3):707–38.CrossRefGoogle Scholar
  63. Rostow WW. Guerilla warfare in underdeveloping areas. The Viet-Nam reader. In: Raskin MG and Fall BB, editors. Random House: New York; 1967.Google Scholar
  64. Scalapino RA. Democratizing dragons: South Korea and Taiwan. J Democr. 1993;4 (3):70–83.CrossRefGoogle Scholar
  65. Slater D, Smith B, Nair G. Economic origins of democratic breakdown? The redistributive model and the post-colonial State. Perspect Polit. 2014;12(2):353–74.CrossRefGoogle Scholar
  66. Soifer H. State power and the economic origins of democracy. Stud Comp Int Develop. 2013;48(1):1–22.CrossRefGoogle Scholar
  67. Solt F. Standardizing the World income inequality database. Soc Sci Q. 2009; 90:231–42.CrossRefGoogle Scholar
  68. Svolik M. The politics of authoritarian rule. Cambridge: Cambridge University Press; 2012.CrossRefGoogle Scholar
  69. Tadjoeddin MZ, Murshed SM. Socio-economic determinants of everyday violence in Indonesia: an empirical investigation of javanese districts, 1994-2003. J Peace Res. 2007;44(6):689–709.CrossRefGoogle Scholar
  70. Tilly C. Coercion, capital, and European States. Cambridge: Blackwell Press; 2001.Google Scholar
  71. Walter B. Building reputation: why governments fight some separatists but not others. Amer J Polit Sci. 2006;50(2):313–30.CrossRefGoogle Scholar
  72. White JW. Economic development and sociopolitical unrest in nineteenth-century Japan. Econ Develop Cultural Change. 1989;37(2):231–60.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Department of Political ScienceMichigan State UniversityEast LansingUSA

Personalised recommendations