Inequality, democracy, and persistence: Is there a political Kuznets curve?

The aim of this paper is to provide comprehensive empirical evidence on recent theories that link democracy and income inequality for the period 1960-1997. In simple cross-country regressions I find a non-monotonic link between democracy and inequality when using ordinary least squares, instrumental variables, and Eusufzai tests. I also employ dynamic panel data techniques, which control for potential simultaneity and heterogeneity problems. I also find support for the existence of a political Kuznets curve. Moreover, it appears that income inequality is unconditionally persistent. Results are robust to different democracy proxies when sensitivity analysis is applied.