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Democracy, domestic institutions, and inequality : evidence from emerging countries and South Korea Park, Sung Wook


This study examines how democracy and globalization and their interaction have shaped economic inequality in the emerging world. Previous studies offer conflicting theoretical expectations and mixed empirical evidence of the effects of globalization and democracy on economic inequality. Also, the nexus among democracy, globalization, and inequality in middle-income countries has received less attention than the same relationship in advanced industrial democracies. Conventional wisdom suggests that democracy creates more egalitarian society, whereas globalization is considered to be one of the common factors that resulted higher economic inequality. My study utilizes a mixed methods approach. I conduct cross-national time-series analyses as well as a case study on South Korea (hereafter, Korea). Surprisingly, contrary to the theoretical expectation, my quantitative analysis finds that democracy is not related to income inequality, regardless of whether a dichotomous or continues measure of democracy is used. However, globalization, as measured by trade openness and FDI, is strongly associated with increased income inequality. Finally, the Korean case suggests that domestic political variables such as government partisanship and party competition influence government efforts to reduce economic inequality, although democracy or democratization do not automatically produce a more egalitarian society. Evidence from the case study suggests that it could be the case that many middle-income countries do not have established left-right politics in the early stage of democratization, creating a situation in which the poor and middle class have limited political representation.

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