Democratic Institutions, Natural Resources, and Income Inequality
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This paper examines how democratic institutions shape the nexus of natural resources and income inequality, under the hypothesis that democracy can help to alleviate the possible effects that resources may have on income inequality. Starting from a survey of the existing literature, we provide a cross-country regression analysis showing that the effect of natural resources on income inequality does indeed depend on democracy. Our results suggest that, if the level of democracy in a country is high, natural resources have the ability to lower inequality. This finding suggests several avenues for future research.
KeywordsInstitutions Natural resources Inequality Democracy
JEL ClassificationQ32 Q34 D73 P48
We thank Nauro Campos, Jan Mares, and an anonymous referee for helpful comments. Horvathova acknowledges support from the Grant Agency of the Czech Republic, Grant No. 17-16633S. Popova acknowledges support from Russian Science Foundation Grant No. 19-18-00262.
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