Akademik Veri Yönetim Sistemi
Recently, significant deteriorations in income distribution and democratisation have been observed globally. These developments highlight the urgency and significance of addressing inequality and fortifying democracies. Therefore, examining these two phenomena’ interactions can provide policymakers with key information in creating a more egalitarian and democratic world. Although there is profound theoretical literature explaining the relationship between democracy and income inequality, empirical studies and evidence on mutual interaction are not strong enough. Given this, the study examines the mutual interaction between democracy and inequality in 14 Latin America and Caribbean nations during the 2003–2021 period through two models, using the Augmented Mean Group estimator. The main findings of the study indicate that while democracy does not have a significant impact on inequality, inequality has a negative and meaningful influence on democracy. Additionally, the outputs show that unemployment strongly affects democracy and inequality, while economic growth has no effect. The results suggest that policymakers can foster democratisation by implementing effective income distribution policies.
