Democracy, hybrid regimes, and inequality: The divergent effects of contestation and inclusiveness

This study examines the effects of democracy and hybrid regimes on income inequality. Despite strong theoretical arguments for the redistributive impact of democracy, empirical evidence of this phenomenon is inconclusive. This study helps to solve this puzzle by suggesting that the two key dimensions of democracy, contestation and inclusiveness/participation, have opposite effects on inequality. Whereas contestation provides incentives for politicians to redistribute, suffrage or participation alone (without competition) affords elites further control over the population and reduces its redistributive threat. Therefore, electoral authoritarianism (characterized by high inclusiveness and medium contestation) is also expected to be more unequal than either democratic or authoritarian regimes. These arguments are primarily supported by the results of instrumental variable regressions of data from 135 countries from 1971 to 2015 and are supplemented by some qualitative evidence. Copyright © 2021 Elsevier Ltd. All rights reserved.