Political Rights and Income Inequality: A Cross-National Test

Among contemporary nations, the relationship between income equality and national wealth exhibits an inverted-U shape low among the richest and poorest nations, and high for nations with intermediate wealth. To examine the reasons for this relationship, I hypothesize that both political democracy and educational enrollment are related in a similar way to income inequality. Two data sets are used in this analysis: modified version of Muller's set of 62 nations circa 1965-1975 and Hoover's data set. Multiple regression reveals that measures of political democracy and the educational enrollment levels have an inverted-U relationship with income inequality. National wealth (GNP) had no consistent direct effect on income inequality. A satisfactory specification of national levels of income inequality must include the polynomial functions of political democracy and education.