Inequality and the instability of polity and policy

Pushan Dutt, Devashish Mitra

Research output: Contribution to journalArticlepeer-review

26 Scopus citations

Abstract

We create alternative measures of political instability, which capture only movements from dictatorship to democracy and vice versa and, unlike older, well-known measures, does not capture government changes that preserve the democratic or dictatorial structure of the country. We show that inequality is positively correlated with our measures of political instability as well as with a well-known measure (used by Alesina and Perotti) but the impact of inequality on the latter is only through components of political instability captured by our measures. We show that our measures have significant policy implications - political instability increases both fiscal and trade polity volatility.

Original languageEnglish (US)
Pages (from-to)1285-1314
Number of pages30
JournalEconomic Journal
Volume118
Issue number531
DOIs
StatePublished - 2008

ASJC Scopus subject areas

  • Economics and Econometrics

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