Transitioning Democracies are a Risky Business in the South

The paper finds that trade is insignificant in explaining income inequality. The results also suggest institutions are good for inequality mitigation for a larger sample of developed and developing countries. Though, the results do not change for some institutions like rule of law when the sample is restricted to developing countries. However, for other institutions like democracy and autocracy, the author finds that former is positively related with inequality and later is negatively related. The results shed light on the fact that transition to democracies come with higher risks for the developing countries and stable economies even with autocratic setup may have more equal societies when compared to newly adopted democratic set ups.