Does Government Intervention Influence Inequality?: Cross-National Analysis
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The purpose of this study is to examine influence of government interventionon inequality in developmental states. We distinguished inequality from twodimensions such as economic and social inequality. And to explain thedifference in the degree of inequality, this paper suggest four theoreticalperspectives such as economic development or modernization theory, thetheory of political democracy, world economy system theory and Keynesiantheory of political economy. Results of analysis are following; first, observingthe distribution per country on relationship between economic inequality andsocial inequality, countries having both higher level of economic inequality andhigher social inequality than the average of all countries are mostly LatinAmerica countries. On the other hand, countries having both lower economicinequality and social inequality than the over all average are mostly EasternEurope countries. In addition, particular fact is that Latin America countrieshave higher economic inequality than other countries compared to socialinequality whereas Asia countries have more critical level of social inequalitythan economic inequality. Second, as a result of conducting panel regressionanalysis with fixed effect model applied for factors having influence oneconomic inequality and social inequality, it is found that factors havinginfluence on each type of inequality are different. However, empirical analysisshows that the alleviation of both economic and social inequality is positivelyaffected by government intervention.
Abstract
The purpose of this study is to examine influence of government interventionon inequality in developmental states. We distinguished inequality from twodimensions such as economic and social inequality. And to explain thedifference in the degree of inequality, this paper suggest four theoreticalperspectives such as economic development or modernization theory, thetheory of political democracy, world economy system theory and Keynesiantheory of political economy. Results of analysis are following; first, observingthe distribution per country on relationship between economic inequality andsocial inequality, countries having both higher level of economic inequality andhigher social inequality than the average of all countries are mostly LatinAmerica countries. On the other hand, countries having both lower economicinequality and social inequality than the over all average are mostly EasternEurope countries. In addition, particular fact is that Latin America countrieshave higher economic inequality than other countries compared to socialinequality whereas Asia countries have more critical level of social inequalitythan economic inequality. Second, as a result of conducting panel regressionanalysis with fixed effect model applied for factors having influence oneconomic inequality and social inequality, it is found that factors havinginfluence on each type of inequality are different. However, empirical analysisshows that the alleviation of both economic and social inequality is positivelyaffected by government intervention.
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