Democracy, policy, and inequality: Efforts and consequences in the developing world

Abstract

Are democracies better at delivering material benefits to the poor? What would be a key mechanism to translate social demands for redistribution to more egalitarian outcomes in the developing world? Analyzing an unbalanced pooled time-series dataset for domestic government spending, welfare state generosity, and income inequality in the developing world from 1971 to 2008, we find that (partial) democracies promote higher levels of domestic government spending, but they are not associated with higher levels of welfare state generosity. Our results also indicate that in developing countries, welfare state generosity is related to more equality. However, domestic government spending does not have any significant impact on income inequality even in democracies.