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The Political Economy of the Kuznets Curve
Author(s) -
Acemoglu Daron,
Robinson James A.
Publication year - 2002
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/1467-9361.00149
Subject(s) - kuznets curve , democratization , economics , redistribution (election) , inequality , autocracy , political instability , politics , economic inequality , miracle , development economics , economic system , macroeconomics , keynesian economics , democracy , economic growth , political science , law , mathematical analysis , mathematics
The paper provides a political economy theory of the Kuznets curve. When development leads to increasing inequality, this can induce political instability and force democratization on political elites. Democratization leads to institutional changes which encourage redistribution and reduce inequality. Nevertheless, development does not necessarily induce a Kuznets curve, and it is shown that development may be associated with two types of nondemocratic paths: an “autocratic disaster,” with high inequality and low output, and an “East Asian Miracle,” with low inequality and high output. These arise either because inequality does not increase with development, or because the degree of political mobilization is low.