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

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