Does Democracy Reduce Economic Inequality?

Democracy is frequently framed as a distributional game. Much of the evidence supporting this possibility rests on the World Bank’s 1996 ‘high-quality’ inequality dataset. Using the updated and revised ‘high-quality’ dataset of 2007, this article revisits those results. Using the same country sample, more years and similar specifications to previous studies, as well as a larger country sample with more appropriate statistical models, we find no relationship between democracy/civil liberties and aggregate measures of economic inequality. Whether, and how, democracy decreases economic inequality remains an open question.