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Within-Country Income Inequality in Multi-decade Scenarios
The research argues that within-country income inequality is driven more by socio-political institutions and state ideology than by economic development or market forces. By integrating Chakravorty's qualitative model of state regimes (extractive, redistributive, and reinvestment) with the quantitative Selectorate theory, the author develops a model where the size of the 'winning coalition' and the bias toward redistribution versus reinvestment serve as primary predictors of the Gini coefficient. Empirical testing using data from 1970-1990 shows that the size of the winning coalition is a strongly significant predictor of inequality, while GDP per capita is not. The paper applies this model to 104 countries across three stylized 50-year global convergence scenarios, finding that redistributive regimes yield the lowest inequality and extractive regimes the highest.
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Document type: Research paper