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Income inequality, fiscal stimuli and political (in)stability

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journal contribution
posted on 2017-02-16, 09:05 authored by Luca Agnello, Vitor CastroVitor Castro, Joao Tovar Jalles, Ricardo M. Sousa
Using data for a large panel of countries, this paper investigates the role played by income inequality and fiscal stimuli episodes in shaping the likelihood of political stability. By means of Tobit estimations, we show that a rise in inequality increases the probability of government crises. However, such adverse distributional effect is reduced when expansionary or increasingly expansionary fiscal stimuli episodes or successful fiscal stimuli programs are put in place.

Funding

Castro and Sousa acknowledge that this work has been financed by Operational Programme for Competitiveness Factors—COMPETE and by National Funds through the FCT—Portuguese Foundation for Science and Technology within the remit of the project “FCOMP-01-0124-FEDER-037268 (PEst-C/EGE/UI3182/2013)”. Castro also wishes to thank the financial support provided by the Portuguese Foundation for Science and Technology under the research grant SFRH/BSAB/113588/2015 (partially funded by COMPETE, QREN and FEDER).

History

School

  • Business and Economics

Department

  • Economics

Published in

International Tax and Public Finance

Pages

1 - 28

Citation

AGNELLO, L. ... et al, 2016. Income inequality, fiscal stimuli and political (in)stability. International Tax and Public Finance, 24 (3), pp. 484–511.

Publisher

© Springer

Version

  • AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Acceptance date

2016-10-17

Publication date

2016-11-04

Notes

The final publication is available at link.springer.com via http://dx.doi.org/10.1007/s10797-016-9428-x

ISSN

0927-5940

eISSN

1573-6970

Language

  • en