Acemoglu et al. (2015)

Question 1

What is the research objective of Acemoglu et al. (2015)?

Answer 1

The objective of this paper is to determine the relation between democracy and it’s effect on redistribution and inequality.

Question 2

What is the main hypothesis of Acemoglu et al. (2015)?

Answer 2

The paper’s main hypothesis is that, via significant increases in taxation due to the median voter moving down the income distribution, democracy leads to more redistribution of income throughout the economy and thus reduced income inequality.

Question 3

What are the main findings of Acemoglu et al. (2015) concerning taxes?

Answer 3

Consistently and significantly, once a permanent democratisation has occurred, taxes as a per cent of GDP rise by at least 11 per cent and upwards of 26 per cent. In the long run, these effects remain yet become more significant.

Question 4

What are the main findings of Acemoglu et al. (2015) concerning inequality?

Answer 4

When the dependent variable is set as the Gini coefficient, there is an unfortunate and consistent outcome of insignificant statistics.

Question 5

What is expected sign of regression output tables in Acemoglu et al. (2015) concerning taxes?

Answer 5

Positive and significant figures. Economically, this is interpreted as a democracy raises taxation by x% of GDP as opposed to non-democratic counterparts.

Question 6

What is expected sign of regression output tables in Acemoglu et al. (2015) concerning inequality?

Answer 6

Negative coefficients on Democracy variable indicating that democratisation reduces inequality of post-tax income by x%.