Do Middle Classes Bring Institutional Reforms?

The paper examines the link between poverty, the middle class and institutional outcomes using a new cross-country panel dataset on the distribution of income and expenditure. It uses an econometric methodology to gauge whether a larger middle clas...

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Main Authors:	Loayza, Norman, Rigolini, Jamele, Llorente, Gonzalo
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	CAPITAL ACCUMULATION CAUSAL EFFECT CITIZENS CORRUPTION COUNTRY EFFECTS COUNTRY-SPECIFIC EFFECTS CREDIT MARKET CREDIT MARKET IMPERFECTIONS CROSS COUNTRY CROSS-COUNTRY INCOME CROSS-COUNTRY PANEL DATA QUALITY DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISTRIBUTIVE POLITICS DOMESTIC MARKETS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC REVIEW ECONOMIC STRUCTURE ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL RESULTS EMPLOYMENT EQUATIONS ERROR TERM EXPLANATORY VARIABLE EXPLANATORY VARIABLES FINANCIAL SECTOR FIXED COSTS FUTURE RESEARCH GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL LEVEL GOVERNANCE QUALITY GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH MODELS HIGH INCOME COUNTRIES HOUSEHOLD INCOME HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME DATA INCOME DIFFERENCES INCOME DISTRIBUTION INCOME INEQUALITY INCOME LEVELS INCOME SOURCES INCOME STUDY INCOMES INDUSTRIALIZATION INEQUALITY INEQUALITY MEASURES INSTITUTIONAL REFORMS INTERNATIONAL TRADE LOW INCOME LOW INCOME COUNTRIES MACROECONOMICS MARKET-ORIENTED ECONOMY MEAN INCOME MEASURES OF POVERTY MIDDLE CLASS MIDDLE CLASS CONSENSUS MONETARY ECONOMICS OUTPUT PER CAPITA POLICY DISCUSSIONS POLICY OUTCOMES POLICY RESEARCH POLITICAL ECONOMY POLITICAL INSTABILITY POLITICAL LEGITIMACY POLITICAL PARTICIPATION POLITICAL SCIENCE POSITIVE IMPACT POVERTY HEADCOUNT POVERTY HEADCOUNT INDEX POVERTY THRESHOLD PROPERTY RIGHTS PUBLIC CHOICE PUBLIC ECONOMICS PUBLIC EXPENDITURES RELATIVE IMPORTANCE RELATIVE POSITION RICH COUNTRIES SERIES OBSERVATIONS SIGNIFICANT IMPACT SOCIAL CONFLICT SOCIAL MOBILITY SOCIAL OUTCOMES SOCIAL POLICIES SOCIAL POLICY UNEQUAL SOCIETIES WEALTH WORLD INCOME DISTRIBUTION
Online Access:	http://documents.worldbank.org/curated/en/2012/03/15975481/middle-classes-bring-institutional-reforms http://hdl.handle.net/10986/19866

id	okr-10986-19866
recordtype	oai_dc
spelling	okr-10986-198662021-04-23T14:03:52Z Do Middle Classes Bring Institutional Reforms? Loayza, Norman Rigolini, Jamele Llorente, Gonzalo CAPITAL ACCUMULATION CAUSAL EFFECT CITIZENS CORRUPTION COUNTRY EFFECTS COUNTRY-SPECIFIC EFFECTS CREDIT MARKET CREDIT MARKET IMPERFECTIONS CROSS COUNTRY CROSS-COUNTRY INCOME CROSS-COUNTRY PANEL DATA QUALITY DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISTRIBUTIVE POLITICS DOMESTIC MARKETS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC REVIEW ECONOMIC STRUCTURE ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL RESULTS EMPLOYMENT EQUATIONS ERROR TERM EXPLANATORY VARIABLE EXPLANATORY VARIABLES FINANCIAL SECTOR FIXED COSTS FUTURE RESEARCH GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL LEVEL GOVERNANCE QUALITY GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH MODELS HIGH INCOME COUNTRIES HOUSEHOLD INCOME HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME DATA INCOME DIFFERENCES INCOME DISTRIBUTION INCOME INEQUALITY INCOME LEVELS INCOME SOURCES INCOME STUDY INCOMES INDUSTRIALIZATION INEQUALITY INEQUALITY MEASURES INSTITUTIONAL REFORMS INTERNATIONAL TRADE LOW INCOME LOW INCOME COUNTRIES MACROECONOMICS MARKET-ORIENTED ECONOMY MEAN INCOME MEASURES OF POVERTY MIDDLE CLASS MIDDLE CLASS CONSENSUS MONETARY ECONOMICS OUTPUT PER CAPITA POLICY DISCUSSIONS POLICY OUTCOMES POLICY RESEARCH POLITICAL ECONOMY POLITICAL INSTABILITY POLITICAL LEGITIMACY POLITICAL PARTICIPATION POLITICAL SCIENCE POSITIVE IMPACT POVERTY HEADCOUNT POVERTY HEADCOUNT INDEX POVERTY THRESHOLD PROPERTY RIGHTS PUBLIC CHOICE PUBLIC ECONOMICS PUBLIC EXPENDITURES RELATIVE IMPORTANCE RELATIVE POSITION RICH COUNTRIES SERIES OBSERVATIONS SIGNIFICANT IMPACT SOCIAL CONFLICT SOCIAL MOBILITY SOCIAL OUTCOMES SOCIAL POLICIES SOCIAL POLICY UNEQUAL SOCIETIES WEALTH WORLD INCOME DISTRIBUTION The paper examines the link between poverty, the middle class and institutional outcomes using a new cross-country panel dataset on the distribution of income and expenditure. It uses an econometric methodology to gauge whether a larger middle class has a causal effect on policy and institutional outcomes in three areas: social policy in health and education, market-oriented economic structure and quality of governance. The analysis find that when the middle class becomes larger (measured as the proportion of people earning more than US$10 a day), social policy on health and education becomes more progressive, and the quality of governance (democratic participation and official corruption) also improves. This trend does not occur at the expense of economic freedom, as a larger middle class also leads to more market-oriented economic policy on trade and finance. These beneficial effects of a larger middle class appear to be more robust than the impact of lower poverty, lower inequality or higher gross domestic product per capita. That may be linked to the evolution of the middle class: they are more enlightened, more likely to take political actions and have a stronger voice. They also share preferences and values for policy and institutional reforms, as well as higher stakes in property rights and wealth accumulation. 2014-08-29T17:56:45Z 2014-08-29T17:56:45Z 2012-03 http://documents.worldbank.org/curated/en/2012/03/15975481/middle-classes-bring-institutional-reforms http://hdl.handle.net/10986/19866 English en_US Policy Research Working Paper;No. 6015 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	CAPITAL ACCUMULATION CAUSAL EFFECT CITIZENS CORRUPTION COUNTRY EFFECTS COUNTRY-SPECIFIC EFFECTS CREDIT MARKET CREDIT MARKET IMPERFECTIONS CROSS COUNTRY CROSS-COUNTRY INCOME CROSS-COUNTRY PANEL DATA QUALITY DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISTRIBUTIVE POLITICS DOMESTIC MARKETS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC REVIEW ECONOMIC STRUCTURE ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL RESULTS EMPLOYMENT EQUATIONS ERROR TERM EXPLANATORY VARIABLE EXPLANATORY VARIABLES FINANCIAL SECTOR FIXED COSTS FUTURE RESEARCH GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL LEVEL GOVERNANCE QUALITY GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH MODELS HIGH INCOME COUNTRIES HOUSEHOLD INCOME HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME DATA INCOME DIFFERENCES INCOME DISTRIBUTION INCOME INEQUALITY INCOME LEVELS INCOME SOURCES INCOME STUDY INCOMES INDUSTRIALIZATION INEQUALITY INEQUALITY MEASURES INSTITUTIONAL REFORMS INTERNATIONAL TRADE LOW INCOME LOW INCOME COUNTRIES MACROECONOMICS MARKET-ORIENTED ECONOMY MEAN INCOME MEASURES OF POVERTY MIDDLE CLASS MIDDLE CLASS CONSENSUS MONETARY ECONOMICS OUTPUT PER CAPITA POLICY DISCUSSIONS POLICY OUTCOMES POLICY RESEARCH POLITICAL ECONOMY POLITICAL INSTABILITY POLITICAL LEGITIMACY POLITICAL PARTICIPATION POLITICAL SCIENCE POSITIVE IMPACT POVERTY HEADCOUNT POVERTY HEADCOUNT INDEX POVERTY THRESHOLD PROPERTY RIGHTS PUBLIC CHOICE PUBLIC ECONOMICS PUBLIC EXPENDITURES RELATIVE IMPORTANCE RELATIVE POSITION RICH COUNTRIES SERIES OBSERVATIONS SIGNIFICANT IMPACT SOCIAL CONFLICT SOCIAL MOBILITY SOCIAL OUTCOMES SOCIAL POLICIES SOCIAL POLICY UNEQUAL SOCIETIES WEALTH WORLD INCOME DISTRIBUTION
spellingShingle	CAPITAL ACCUMULATION CAUSAL EFFECT CITIZENS CORRUPTION COUNTRY EFFECTS COUNTRY-SPECIFIC EFFECTS CREDIT MARKET CREDIT MARKET IMPERFECTIONS CROSS COUNTRY CROSS-COUNTRY INCOME CROSS-COUNTRY PANEL DATA QUALITY DATA SET DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT INDICATORS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISTRIBUTIVE POLITICS DOMESTIC MARKETS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC REVIEW ECONOMIC STRUCTURE ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL RESULTS EMPLOYMENT EQUATIONS ERROR TERM EXPLANATORY VARIABLE EXPLANATORY VARIABLES FINANCIAL SECTOR FIXED COSTS FUTURE RESEARCH GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL LEVEL GOVERNANCE QUALITY GROSS DOMESTIC PRODUCT GROSS DOMESTIC PRODUCT PER CAPITA GROWTH MODELS HIGH INCOME COUNTRIES HOUSEHOLD INCOME HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME DATA INCOME DIFFERENCES INCOME DISTRIBUTION INCOME INEQUALITY INCOME LEVELS INCOME SOURCES INCOME STUDY INCOMES INDUSTRIALIZATION INEQUALITY INEQUALITY MEASURES INSTITUTIONAL REFORMS INTERNATIONAL TRADE LOW INCOME LOW INCOME COUNTRIES MACROECONOMICS MARKET-ORIENTED ECONOMY MEAN INCOME MEASURES OF POVERTY MIDDLE CLASS MIDDLE CLASS CONSENSUS MONETARY ECONOMICS OUTPUT PER CAPITA POLICY DISCUSSIONS POLICY OUTCOMES POLICY RESEARCH POLITICAL ECONOMY POLITICAL INSTABILITY POLITICAL LEGITIMACY POLITICAL PARTICIPATION POLITICAL SCIENCE POSITIVE IMPACT POVERTY HEADCOUNT POVERTY HEADCOUNT INDEX POVERTY THRESHOLD PROPERTY RIGHTS PUBLIC CHOICE PUBLIC ECONOMICS PUBLIC EXPENDITURES RELATIVE IMPORTANCE RELATIVE POSITION RICH COUNTRIES SERIES OBSERVATIONS SIGNIFICANT IMPACT SOCIAL CONFLICT SOCIAL MOBILITY SOCIAL OUTCOMES SOCIAL POLICIES SOCIAL POLICY UNEQUAL SOCIETIES WEALTH WORLD INCOME DISTRIBUTION Loayza, Norman Rigolini, Jamele Llorente, Gonzalo Do Middle Classes Bring Institutional Reforms?
relation	Policy Research Working Paper;No. 6015
description	The paper examines the link between poverty, the middle class and institutional outcomes using a new cross-country panel dataset on the distribution of income and expenditure. It uses an econometric methodology to gauge whether a larger middle class has a causal effect on policy and institutional outcomes in three areas: social policy in health and education, market-oriented economic structure and quality of governance. The analysis find that when the middle class becomes larger (measured as the proportion of people earning more than US$10 a day), social policy on health and education becomes more progressive, and the quality of governance (democratic participation and official corruption) also improves. This trend does not occur at the expense of economic freedom, as a larger middle class also leads to more market-oriented economic policy on trade and finance. These beneficial effects of a larger middle class appear to be more robust than the impact of lower poverty, lower inequality or higher gross domestic product per capita. That may be linked to the evolution of the middle class: they are more enlightened, more likely to take political actions and have a stronger voice. They also share preferences and values for policy and institutional reforms, as well as higher stakes in property rights and wealth accumulation.
format	Publications & Research :: Policy Research Working Paper
author	Loayza, Norman Rigolini, Jamele Llorente, Gonzalo
author_facet	Loayza, Norman Rigolini, Jamele Llorente, Gonzalo
author_sort	Loayza, Norman
title	Do Middle Classes Bring Institutional Reforms?
title_short	Do Middle Classes Bring Institutional Reforms?
title_full	Do Middle Classes Bring Institutional Reforms?
title_fullStr	Do Middle Classes Bring Institutional Reforms?
title_full_unstemmed	Do Middle Classes Bring Institutional Reforms?
title_sort	do middle classes bring institutional reforms?
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2012/03/15975481/middle-classes-bring-institutional-reforms http://hdl.handle.net/10986/19866
_version_	1764443970985787392

Do Middle Classes Bring Institutional Reforms?

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