Inequality, Development, and the Stability of Democracy -Lipset and Three Critical Junctures in German History

51 Pages Posted: 6 Jun 2011

See all articles by Florian Jung

Florian Jung

University of St. Gallen

Uwe Sunde

Ludwig Maximilian University of Munich (LMU)

Date Written: June 2011

Abstract

This paper studies the endogenous emergence of political regimes in societies in which productive resources are distributed unequally and institutions do not ensure political commitments. The results imply that for any level of development there exists a distribution of resources such that democracy emerges in equilibrium, but there are distributions of resources for which democracy is infeasible in equilibrium irrespective of the level of development. The model also delivers results on the stability of democracy with regard to changes in the economic and demographic environment. The results are consistent with the different political regimes that emerged in Germany after 1871.

Keywords: Coalition Formation, Democracy, Development, Income inequality

JEL Classification: H10, O10, P16

Suggested Citation

Jung, Florian and Sunde, Uwe, Inequality, Development, and the Stability of Democracy -Lipset and Three Critical Junctures in German History (June 2011). CEPR Discussion Paper No. DP8406, Available at SSRN: https://ssrn.com/abstract=1857356

Florian Jung (Contact Author)

University of St. Gallen ( email )

St. Gallen

Uwe Sunde

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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