by Marina Dodlova and Anna Giolbas
German Institute of Global and Area Studies (GIGA) Working Papers No 273, May 2015
The debate on whether democracy and inequality increase the level of redistribution in a country is still ongoing. The authors construct a model that predicts a higher probability of redistribution in democracies than in autocracies. Further, with higher initial inequality, there should be more redistribution in democracies but not necessarily in autocracies. The authors test these predictions using data on social transfers in developing countries for the period 1960–2010. They confirm that democracy increases redistribution and, to some extent, that there is more redistribution with rising inequality.