Political Regimes and Economic Inequality, 1963-2002: An Empirical Investigation with New Data

In James K. Galbraith. Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. New York: Oxford University Press (2012).

Posted: 12 Jul 2014

See all articles by Sara Hsu

Sara Hsu

State University of New York at New Paltz

James K. Galbraith

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs; Levy Economics Institute of Bard College

Wenjie Zhang

Lyndon B. Johnson School of Public Affairs

Date Written: September 28, 2008

Abstract

This paper was prepared for the United Nations Research Institute on Social Development. It provides evidence on the relationship between economic inequality and political regime. Where much of the literature argues that democracy is egalitarian, we find that indeed it is not, and we suggest that the conventional argument is an artifact of the data scales commonly in use. Using the latest UTIP-UNIDO data set on economic inequality (Kum 2008) and an original, categorical data set on regimes, we find that particular regime types do influence the level of inequality. In particular, communist countries and Islamic republics are more equal than their economic characteristics would predict, while conservative (as distinct from social) democracies are somewhat less equal than otherwise expected. Further, within democratic countries with changing governments and policies, we find short-term shifts in the level of inequality. However, these are generally smaller than those associated with major differences of regime type.

Suggested Citation

Hsu, Sara and Galbraith, James K. and Zhang, Wenjie, Political Regimes and Economic Inequality, 1963-2002: An Empirical Investigation with New Data (September 28, 2008). In James K. Galbraith. Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. New York: Oxford University Press (2012). , Available at SSRN: https://ssrn.com/abstract=2464639

Sara Hsu (Contact Author)

State University of New York at New Paltz ( email )

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James K. Galbraith

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

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Levy Economics Institute of Bard College

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Wenjie Zhang

Lyndon B. Johnson School of Public Affairs ( email )

Lyndon B. Johnson School of Public Affairs
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Austin, TX 78713-8925
United States

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