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Cervellati, Matteo; Fortunato, Piergiuseppe; Sunde, Uwe (2007): Are all democracies equally good? The role of interactions between political environment and inequality for rule of law. IZA Discussion Papers / Forschungsinstitut für Zukunft und Arbeit, Bonn, 2984
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Abstract

Using cross-country data, we find evidence for a significant negative interaction effect between democracy and inequality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with institutions of higher quality when inequality is lower.