Mamoon, Dawood (2008): How Does Democracy fare with Economic Welfare for a Trading Nation?
Download (219Kb) | Preview
The paper examines how political institutions in comparison to legal, social and economic institutions fare with different measures of inequality in a cross section framework. The empirical analysis suggests that countries which practice democracy are less prone to unequal outcomes especially when it comes to wage inequality and income inequality whereas autocracy is associated with higher level of wage inequalities but its impact on income inequalities are insignificant. Though under good economic management, even autocracies may redistribute incomes from the richest to the poorest, more generally an autocratic set up violates the median voter hypothesis. The results also show that political stability is more sensitive to inequalities than democracy and autocracy which is to say that the countries which are internally politically stable also form more equal societies.
|Item Type:||MPRA Paper|
|Original Title:||How Does Democracy fare with Economic Welfare for a Trading Nation?|
|Keywords:||Institutions, Trade Liberalisation, Redistribution, Wage Inequality|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development
F - International Economics > F1 - Trade > F15 - Economic Integration
P - Economic Systems > P3 - Socialist Institutions and Their Transitions
|Depositing User:||Dawood Mamoon|
|Date Deposited:||13. Sep 2008 00:43|
|Last Modified:||12. Feb 2013 12:20|
Chen, Shaohua and Ravallion, Martin, “Household Welfare Impacts of China’s Accession to the World Trade Organization,” World Bank Policy Research Working Paper 3040, 2003 www.econ.worldbank.org/files/26013_wps3040.pdf Chong, Alberto and Mark Gradstein, “Inequality and Institutions,” Inter-American Development Bank, Working Paper No. 506, April 2004.
Cockburn, John, “Trade Liberalization and Poverty in Nepal: A Computable General Equilibrium Micro Simulation Analysis,” The Centre for the Study of African Economies Working Paper Series. Working Paper 170, 2001 http://www.bepress.com/csae/paper170
Dollar, David and Aart Kraay, “Institutions, Trade and Growth,” Journal of Monetary Economics, 50 (1), 2003, pp. 133-162.
Easterly, W., “The Middle Class Consensus and Economic Development,” Journal of Economic Growth, Vol. 6, No. 4, 2004 pp. 317-336.
Engerman, S. L. and K. L. Sokoloff, “Factor Endowments, Inequality, and Paths of Development among New World Economies,” NBER Working Paper No. 9259, 2002.
Frankel, Jeffery, and David Romer, “Does Trade Cause Growth?” American Economic Review, Vol. 89, No. 3, 1999, pp. 379-399.
Friedman, Jed, “Differential Impacts of Trade Liberalisation on Indonesia’s Poor and Non-Poor,” Conference on International Trade and poverty, Stockholm, October 20, 2000
Galbraith, Jame K. and Hyunsub Kum, “Inequality and Economic Growth: Data Comparisons and Econometric Tests,” UTIP Working paper No. 21, The University of Texas at Austin, 2002
Glaeser, Edward, L., Raphael La Porta,, Florencio Lopez-de-Silanes, and Andrei Shleifer, “Do Institutions cause Growth,” Journal of Economic Growth, Vol. 9, No. 3, 2004a, pp. 271-303
Glaeser, Edward, L., Raphael La Porta,, Florencio Lopez-de-Silanes, and Andrei Shleifer, “Explaining Growth: Institutions, Human Capital, and Leaders,” (PD: Preliminary Draft) 2004b http://www.brook.edu/es/commentary/journals/bpea_macro/papers/20040325_glaeser.pdf
Gradstein, Mark, Branko Milanovic and Yvonne Ying, “Democracy and Income Inequality: An Empirical Analysis,” (Unpublished) December 2001
Gupta, Sanjeev, Hamid Davoodi and Rosa Alonso-Terme, “Does Corruption Affect Income Inequality and Poverty?” IMF Working Paper, WP/98/76, May 1998
Hall, Robert E., and Charles Jones, “Why do Some Countries Produce So Much More Output per Worker than Others?” Quaterly Journal of Economics, Vol. 114, 1999, pp. 83-116
Hellman, J., and Daniel Kaufmann, “The Inequality of Influence,” Washington DC, US, World Bank, 2002
Justino, Patricia, “Redistribution, Inequality and Political Conflict,” Poverty Research Unit, Sussex, PRUS Working Paper No. 18, 2004.
Kaufman, Daniel, Aaart Kraay and Zoido-Lobaton, “Governance Matters II: Updated Indicators for 2000/01,” Policy Research Working Paper 2772, The World Bank, 2002 http://www.worldbank.org/wbi/governance/pdf/govmatters2.pdf
Keefer, P., “Polarisation, Politics, and Property Rights: Links between Inequality and Growth,” Public Choice, Vol. 111, No. 1-2, 2002, pp. 127-54
Lofgren, Hans, “Trade Reform and the poor in morocco: A Rural-Urban General Equilibrium Analysis of Reduced Protection,” TMD Discussion paper, IFPRI, Washington DC, No. 38, 1999
Mamoon, Dawood and S. Mansoob Murshed, “Are Institutions more important than Integration?” Institute of Social Studies, Working Paper Series No. 416, November 2005
Milanovic, Branko, “The Median-Voter Hypothesis, Income Inequality, and Income redistribution: An Empirical Test with the required Data,” European Journal of Political Economy, Vol. 16, 2000, pp. 367-410
Murshed, Mansoob S. and Scot Gates, “Spatial-Horizontal Inequality and the Maoist Insurgency in Nepal,” DFID, Februray 2003
Rodrik, Dani, “Institutions for High Quality Growth: What They are and How to Acquire Them,” IMF Conference on Second Generation Reforms, October, 1999
Rodrik, Dani, Arvind Subramanian and Francesco Trebbi , “Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development,” Journal of Economic Growth, Vol. 9, No. 2, 2004, pp. 131-165
Rose, Andrew, “Do WTO Members Have a More Liberal Trade Policy?” NBER Working Paper 9347, 2002
Sachs, Jeffrey D. and Andrew Warner (1995), ‘Economic Reform and Process of Global Integration,’ Brookings Papers on Economic Activity, Vol. 1, 1995, pp. 1-118
Segura-Cayuela, Ruben, “Inefficient Policies, Inefficient Institutions and Trade,” Job Market Paper, MIT, November 2005
Smeeding, M. Timothy, “Globalisation, Inequality and the Rich Countries of the G-20: Evidence From the Luxembourg Income Study (LIS),” Social Policy Research Centre (SPRC) Discussion Paper No. 122, December 2002.
Yudaeva, Ksenia, “Globalisation and Inequality in CIS Countries: Role of Institutions,” GDN Conference Paper, January 2003