Do Middle Classes Bring Institutional Reforms?
The paper examines the link between poverty, the middle class and institutional outcomes using a new cross-country panel dataset on the distribution of income and expenditure. It uses an econometric methodology to gauge whether a larger middle clas...
| Main Authors: | , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/03/15975481/middle-classes-bring-institutional-reforms http://hdl.handle.net/10986/19866 |
| Summary: | The paper examines the link between
poverty, the middle class and institutional outcomes using a
new cross-country panel dataset on the distribution of
income and expenditure. It uses an econometric methodology
to gauge whether a larger middle class has a causal effect
on policy and institutional outcomes in three areas: social
policy in health and education, market-oriented economic
structure and quality of governance. The analysis find that
when the middle class becomes larger (measured as the
proportion of people earning more than US$10 a day), social
policy on health and education becomes more progressive, and
the quality of governance (democratic participation and
official corruption) also improves. This trend does not
occur at the expense of economic freedom, as a larger middle
class also leads to more market-oriented economic policy on
trade and finance. These beneficial effects of a larger
middle class appear to be more robust than the impact of
lower poverty, lower inequality or higher gross domestic
product per capita. That may be linked to the evolution of
the middle class: they are more enlightened, more likely to
take political actions and have a stronger voice. They also
share preferences and values for policy and institutional
reforms, as well as higher stakes in property rights and
wealth accumulation. |
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