Inequality, Economic Development and Democratization

What are the economic conditions most favorable to democratization? Although multiple theories have argued that the economic conditions of a country are somehow related to its chances of democratization, so far these claims have received little empirical support. Empirical studies have failed to find any relationship between development or inequality, on the one hand, and democratization, on the other. This paper argues that the reason why previous theories have been unable to uncover the true effect of inequality and development is that they have assumed that both of these factors affect democratization independently of one another. Yet, income distribution has different meanings and consequences at different income levels, and vice versa. This paper combines, for the first time, modernization and inequality theories and shows that inequality affects democratization differently at different levels of development. In middle income countries inequality fosters democratization; in poor and rich countries, however, it harms democratization.