Martin Baur
Politics and Income Distribution

Abstract: The connection between political and institutional variables and income distribution has not gained much attention so far in economics. In a first step, this paper presents the state of research between politics and income distribution with a focus on Public Choice aspects of income distribution, e.g. redistribution, political institutions and participation. In a second step, propositions derived from the research literature are empirically tested. Starting from the notion of Kuznets (1955) about the necessity of the integration of the working class into the political structure of a country as a condition for decreasing income inequality, the role of participation, interest group organization and democratic institutions in the context of income distribution are empirically analysed. First panel regression results support the notion that countries in which the population is more integrated into the political structure experience less income inequality.


JEL: C13 D31 D72 O43.
Keywords: Democratic Institutions, Income Distribution, Interest Groups, Participation, Political Rights, Public Choice, Voter Turnout.



Download Full Text