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Bi Zhaohui
''Income inequality, redistribution and democratization''
( 2007, Vol. 4 No.35 )
We consider that in a society, there are conflicts of income redistribution between the rich (class) and the poor (one), and the extent of income inequality s conflict between these two groups in the society, bringing to a revolution aimed for more redistribution. In our model, we assume that there are two types of poor: weak and strong. The difference between the weak type and the strong type is that the later can win through a revolution, but the former can not. However, this is the private information of the poor and is not observed by the rich. When income inequality increases, with this asymmetry of information, the weak type of the poor is more likely to attempt a revolution. As a result, larger inequality results in higher probability of democratization.
Keywords: Democratization
JEL: D7 - Analysis of Collective Decision-Making: General
O1 - Economic Development: General
Manuscript Received : Sep 21 2007 Manuscript Accepted : Sep 22 2007

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