When More Democracy Means More Inequality: A Path Analysis

Abstract

Path analysis is used to examine an observed positive relationship between inequality and democracy. Specifically, the impact of democracy and corruption on inequality and per capita income is assessed based on a cross-sectional data set covering 125 countries. We show high inequality democracies are associated with elevated corruption, lower per capita income, and a ceiling on democratic achievement. We argue that democracy increasing in tandem with inequality is consistent with authoritarian leadership attempting to grow an economy for self-enrichment. We propose measures of democracy need to account for democratic policies whose actual aim may be the enrichment of elites.