The Effect Of Polity On The Economic Growth And The Income Inequality:
Panel Data Methodology
Abstract
Despite the fact that the global economy grows, the income inequality
increases. The Income Inequality is an important factor which affects
the human life negatively both in the financial and the social manner.
It has been made lots of investigations whose topic is the economic
growth and the income inequality. In this paper, it has been compared
the connection between the economic growth and the income inequality in
terms of the polity in the countries. Therefore, it has been desired to
be brought a different perspective into the literature on the subject of
the economic growth and the income inequality. It has been given
information about the situation in the world especially aimed at the
income inequality. The correlation of “Gini Coefficient” and
“Economic Growth” belonging to the democratic countries (USA, United
Kingdom and Germany) and the autocratic countries (Ethiopia, Nigeria and
Gabon) in terms of their polities has been tested with the Panel Data
Methodology. Empirical analysis involves the period of 1995-2015. In the
results obtained by making Panel Data Model, it has been ascertained a
negative correlation between the Economic Growth and the Income
Inequality for the democratic countries. However in the autocratic
countries, it has been seen that this correlation is very weak.