Democratic Degrees and Inequality.

This article tests the assumption in recent democratization literature that economic inequality declines after democratization. Existing research fail to address theoretical and methodological problems. The theoretical problem is the similar treatment of different levels of democracy. There is no reason to believe that the relationship between democratization and inequality is linear. This paper tests the relationship between different levels of democratization and inequality. It also addresses two methodological problems in previous studies: unobserved heterogeneity and missing data. By relying on cross sectional regressions, earlier studies produce biased results. I construct a panel analysis using and updated dataset and employ a fixed-effects model. Existing research employs list-wise deletion to deal with missing data. I use multiple imputations to eliminate bias and get more tractability from the data available. The finding of this paper is that the assumption in the democratization literature that upon transition to democracy the majority will benefit from greater income equality does not hold. This paper finds a non-monotonic relationship: low levels of democracy are associated with higher levels of income inequality. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]