Income inequality, fiscal stimuli and political (in)stability

Luca Agnello, Vitor Castro, João Tovar Jalles, Ricardo M. Sousa

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Using data for a large panel of countries, this paper investigates the role played by income inequality and fiscal stimuli episodes in shaping the likelihood of political stability. By means of Tobit estimations, we show that a rise in inequality increases the probability of government crises. However, such adverse distributional effect is reduced when expansionary or increasingly expansionary fiscal stimuli episodes or successful fiscal stimuli programs are put in place.

Original languageEnglish
Pages (from-to)484-511
Number of pages28
JournalInternational Tax and Public Finance
Volume24
Issue number3
DOIs
Publication statusPublished - 2017

Keywords

  • Expansionary policies
  • Fiscal stimuli
  • Income distribution
  • Institutional quality
  • Political environment
  • Tobit regression

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