The middle class and the development process

Stable, higher income democracies often have both a strong middle class and relatively low levels of inequality. In contrast, lower and middle income countries with highly unequal patterns of income distribution and stratified social structures often have a weak middle class, more social conflict and a tendency to populist and/or authoritarian politics. This paper investigates, for a sample of more than 120 countries, some empirical correlations between the size of the middle class and the following set of variables: the level (mean) of per capita income and wealth, the degree of inequality (Gini coefficients) of per capita income and wealth, the level and composition of public expenditure, the share of small and medium size enterprises in employment and output and an indicator of democracy.