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.
International audienceThis 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
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.