Does Democracy Reduce Ethnic Inequality?

Abstract

To what extent and under what conditions do democratic institutions reduce socioeconomic ethnic inequality? I argue that democratization reduces ethnic inequality by introducing electoral accountability, which facilitates a series of egalitarian policies. However, the effect of democratization is conditional on the distribution of resources under the previous, nondemocratic regime. Countries that were more ethnically unequal prior to democratization experience greater egalitarian effects following democratization. To examine the argument, I leverage multiple country- and group-level measures of ethnic inequality. Using fixed effects regressions, instrumental variable analyses, and event studies, I demonstrate that democratization substantively reduces ethnic inequality, but mainly for countries with high predemocratic levels of inequality.