Globalization, Government Ideology, and Income

Inequality in Developing Countries

Eunyoung Ha

Claremont Graduate University

This article examines how globalization, government ideology, and their interaction have shaped income
distribution in 59 developing countries from 1975 to 2005. Using pooled time-series data analysis, the results
show that globalization, measured by trade flows and foreign direct investment, has significantly expanded income
inequality in developing countries. However, countries with leftist government parties and chief executives have
experienced significantly smaller income gaps and even moderated the income inequality from increasing world
market integration. The results in this article suggest that the traditional role of government ideology for income
redistribution, drawn from the experiences of advanced countries, is applicable to the developing world as well.
Rather than being diminished by the integration of international markets, the influence of government ideology
will continue to play a key role in shaping the outcomes of globalization.

ccording to standard trade theory (i.e., the

Stolper-Samuelson theorem), international
market integration should reduce income gaps
in developing countries by raising the relative prices and
demand for unskilled labor, which developing countries
have in abundance. Contrary to this expectation,
however, income inequality in developing countries
has significantly increased at the same time that global
trade and capital flows have surged. Thus, the impact
of globalization on income inequality has become a
central question in international and comparative
political economy (e.g., Alderson and Nielson 1999;
Dixon and Boswell 1996; Lee 2005; Lundberg and
Squire 2003; Milanovic and Squire 2005; Reuveny and
Li 2003; Rudra 2008).
In contrast to the intensity of the debate about
the impact of globalization on income inequality in
the developing world, the role of government ideological orientation with respect to income inequality
has been comparatively neglected. This is an oversight, because most governmentsrich and poor
alikedo redistribute income through taxation and
welfare spending programs such as social retirement
benefits and unemployment compensation. Thus,
income inequality is a variable over which governments manifestly have control, if they choose to use
it. The nature of this control is highly influenced by
the ideological orientation of the government in

power, however: leftist governments are expected to

increase taxes on the rich and redistribute wealth to the
less well-off, while rightist governments typically are
expected to do the opposite, cutting taxes to maximize
the effects of the free market and decreasing the
breadth and depth of welfare spending. Power resources theory on advanced industrial countries confirms
that leftist power in government plays a systematic and
decisive role in determining variations in governmental redistribution and its outcomes (Esping-Andersen
1985; Huber and Stephens 2001; Korpi and Palme
2003). Given the strong theoretical expectation that the
ideological orientation of the government is consequential for social policymaking, it is notable that the
impact of government ideology on redistribution and
income inequality has rarely been empirically examined in studies of the developing world.
There are both theoretical and empirical reasons
why this might be. Theoretically, political variables were
traditionally considered to have lesser effect on income
distribution in less developed countries (LDCs), where
political institutions are less consolidated and where
organizations for the underprivileged, particularly leftist
political parties and labor unions, are weaker as
compared to advanced industrial societies. Political
parties in LDCs are also, in general, deemed to be
more personalized than ideologically or programmatically oriented, making the pursuit of redistribution a

The Journal of Politics, Vol. 74, No. 2, April 2012, Pp. 541557
 Southern Political Science Association, 2012

doi:10.1017/S0022381611001757
ISSN 0022-3816

541

542
less consistent and coherent part of their platforms
(Mainwaring and Torcal 2006). Indeed, welfare and tax
transfers in LDCs have never been consistently distributed toward the middle or lower classes (Kapstein and
Milanovic 2002; Rudra 2008). Even when genuinely
redistributive policies do exist, their impact might still
be minimal compared to that in developed countries,
because most developing countries have a comparatively small proportion of formal sector employment
and even have regressive social retirement schemes
(Lindert, Skoufias, and Shapiro 2006). Practically speaking, there has been no high-quality data produced on
government ideology usable for comparative empirical
studies on large numbers of developing countries.
Nonetheless, for both theoretical and practical
reasons, I am interested in whether and how government ideology matters for differences in inequality
within developing countries. First, contrary to the
received wisdom outlined in the paragraph above,
policymakers party affiliations and ideological orientations do strongly affect policies in LDCs (Murillo
2001). Researchers also document that citizens in LDCs
consider the left-right dimension, rather than just the
politics of personality, when structuring their political
preferences (Colomer and Escatel 2004). In addition,
although direct social expenditures in LDCs are smaller
than those in advanced economies, governments often
redistribute wealth to the poor or middle classes
through indirect policies such as housing regulations,
basic services provision, and labor market regulations.
For example, leftist parties in Latin America allocate
expenditures to progressive programs such as noncontributory and conditional transfer programs, school
feeding programs, and preventive health care.
Second, the absence of high-quality data is a
tractable problem. In the present article, for example,
the data used originated with the World Banks
recent Database on Political Institutions (DPI) and
covers 59 developing countries from 1975 to 2005.
The DPI lists the ideological positionsleft, center,
or rightof the three largest government parties and
chief executives for LDCs. The shortcomings of this
approach become apparent when considering countries with governing coalitions comprised of four or
more parties. Accordingly, I extended the original
dataset to include all government parties, improved
the information on government formation, and
generated additional measures for the ideological
positions of government parties and chief executives.1
1
Online appendices are available at http://journals.cambridge.org/
jop. The data will be available on my homepage (http://wfs.cgu.edu/
hae/index.html) upon publication.

eunyoung ha
The broad goal of this article is to investigate
the impact of government ideological orientation on
income inequality within LDCs. In particular, I hope
to address whether political commitment to redistribution brings countries closer to internal economic
equality. In so doing, income inequality may serve as
a test case with which to judge the overall influence of
government ideology in LDCs. More narrowly, I explore
how useful an explanatory framework built on the
experience of established industrial countriesnamely,
the premise that ideological preferences of political
leadership are an important determinant of income
distributionis for understanding inequality in the
very different historical and structural context of
LDCs. My second broad goal is to place these results
on ideology within the context of the global economy that has emerged over recent decades. In
particular, how have the relationships between government ideology and income distribution interacted
with globalization? Does globalization mute or intensify the effects of government ideology?
Accordingly, this article evaluates how globalization, government ideology, and their interactions
have shaped income inequality in LDCs. My empirical results confirm that, contrary to standard trade
theory, fast-growing trade flows and foreign direct
investmenttwo measures of globalizationare
strongly associated with rising income inequality in
developing countries. My results also confirm that
the ideological preferences of government parties and
chief executives do significantly influence income
distribution in developing countries: governments
with leftist political leadership are strongly associated
with lower inequality than those with rightist leadership. Moreover, the role of government ideology has
not been eroded by globalization, but rather has been
resilient to it: governments with leftist parties and
chief executives have moderated the upward pressure
of market integration toward inequality.
This article is organized into five parts. First, I
review the theoretical and empirical scholarship on
the relationship between globalization and income
inequality in developing countries. Second, I discuss
how government ideology can be an important
determinant of income distribution in developing
countries. I also review how globalization and government ideology may interact with each other to
shape income distribution. In the next two sections, I
describe the data and empirical models employed,
present the findings, and discuss the robustness of
different measurements and empirical models
used. I conclude by discussing the implications of
my results.

globalization, ideology, and inequality

Globalization and Income Inequality

According to standard trade theory, i.e., the StolperSamuelson theorem, globalization is expected to
narrow income disparities within developing countries (Stolper and Samuelson 1941). This is because
free trade increases the demand for goods and
services from the sectors which use relatively abundant factors in a country, while reducing the demand
for goods and services from the sectors with scarce
factors. By so doing, free trade also raises the incomes
of owners of abundant factors of production and
reduces the incomes of owners of scarce factors of
production. Because LDCs have proportionally more
unskilled labor than developed countries, greater
trade openness increases the demand and prices for
unskilled labor, relative to that for both their capital
and their skilled labor (it also has this effect relative
to unskilled labor in developed countries). Accordingly, increased trade flows should reduce wage gaps
between unskilled labor in LDCs and capital and
skilled labor there, reducing overall within-country
income inequality.
Similarly, capital openness is also expected to
reduce income inequality in LDCs. Foreign direct
investment (FDI) increases developing countries
capital stock, which reduces the marginal product
of capital but increases the marginal product of labor.
This happens in two ways. First, marginal returns to a
resource are inversely related to its level of abundance; thus, a small capital stock produces high
returns to capital, but a larger capital stock will be
associated with smaller (though hardly negative)
marginal returns. Second, increased levels of capital
make labor more productive. Put simply, a carpenter
with a power saw is more productive than a carpenter
with a hand saw. Since resource returns are equivalent to marginal productivity, by increasing the
productivity of labor, FDI should increase the marginal return to labor (which is equivalent to the wage)
as well. This would increase labors income share and
reduce income gaps.
However, contrary to theoretical expectations,
income inequality in LDCs has actually risen rapidly
alongside increases in market liberalization and FDI.
Most explanations for this apparent paradox rely on
making a distinction between skilled and unskilled
labor, and the notion of a skill premium earned by the
former. This collection of explanations can be termed
the technology-centered globalization-inequality
thesis. First, it is observed that trade often shifts the
production of intermediate inputs from developed to

543
developing countries. Although intermediate products
are unskilled-labor-intensive from a developed
countrys perspective (thus making their observed
discarding by rich countries consistent with, rather
than contradictory to, Stolper-Samuelson and comparative advantage), they are still relatively skilledlabor-intensive from a developing countrys point of
view (Feenstra and Hanson 1997). The arrival within
LDCs of relatively skilled-labor intensive industries
explains the increase in demand for and hence wages
of the small pool of local skilled workers, and further
widens income inequality vis-a`-vis their unskilled
counterparts.
A second explanation for this paradox, closely
related to the first, is that FDI facilitates technology
diffusion from developed countries to developing
ones. Although developed countries do not necessarily transfer their best technologies to LDCs
(they still retain specialization in production processes that make intensive use of their relatively
abundant factors of production, i.e., technologically
advanced capital, which again is consistent with
Stolper-Samuelson and comparative advantage), the
transferred technologies are relatively skill intensive
from the perspective of the LDCs, and at least more
skill intensive than those previously produced domestically. It is also observed that the sectors actually
grown and developed by FDI tend in practice, as
opposed to in theory (which, as discussed above,
would predict the opposite), to be capital intensive,
and capital-intensive industries also tend to be
skilled-labor intensive (Feenstra and Hanson 1997).
Confirming these observations, several scholars
have found that trade has increased the relative
demand for skilled labor and produced a rise in skill
premia (e.g., Conte and Vivarelli 2007). Similarly,
studies have found that multinational corporations in
LDCs pay higher wages for skilled workers than local
companies (Feenstra and Hanson 1997; Mazumdar
and Mazaheri 2000). A number of other empirical
studies conducted with a broader scope have also
found globalization to be systematically associated
with the expansion of income inequality (Alderson
and Nielson 1999; Dixon and Boswell 1996; Lee 2005;
Lundberg and Squire 2003; Milanovic and Squire
2005; Rudra 2008), while others find mixed results
(e.g., Reuveny and Li 2003).
Still, most analysis on globalization and inequality in LDCs has been too narrow, especially compared
with work done on advanced industrial economies.
For example, most studies have focused only on
economic determinants, such as trade, FDI, and/or
technology. However, it is impossible to assume that

544
middle- or lower-class populations would automatically gain or lose from any purely economic development. The content and effects of government policies
often differs, particularly with respect to the distributive effects of market liberalization, and usually
varies according to domestic political determinants,
even among countries with similar fiscal capacities.
Therefore, a more fruitful research approach would
identify these important domestic political determinants, instead of focusing on trying to find a mechanistic link between globalization and inequality.

Globalization, Government
Ideology, and Income Inequality
In studies of developing countries, the state regime
type, i.e., democratic versus authoritarian, has been
considered to be a major political determinant of
income inequality (e.g., Burkhart 1997; Huber et al.
2006; Lee 2005; Reuveny and Li 2003; Rudra 2008).
According to the literature, a more even distribution
of political power among the citizenryespecially the
enfranchisement of all citizensnecessarily leads to
organized political competition which in turn helps
spread economic power and reduces income inequality. When there is no competition between political
groups (as in authoritarian regimes), the government
is more susceptible to individual pressures or favoritism, benefiting the haves at the expense of the
have-nots. In contrast, when there is competition
between political groups (as in democratic regimes),
political elites are more likely to respond to the
interests of the poor or middle class in the area of
redistribution. The idea that political leaders in
democratic regimes have a natural incentive to
redistribute wealth to appeal to the broad electorate
originates in the median voter theorem. The median
voter is the decisive voter in an electoral democracy
(Downs 1957) and is said to prefer larger redistributive spending when income inequality in a society is
upward-skewed, which places his/her median income
further below the mean (Meltzer and Richard 1981).
Because income inequality is generally upward
skewed in most LDCs, politicians under electoral
competition there would thus be expected to redistribute significantly to satisfy this median voter.
However, increased political equality has not
necessarily lead to more income equality in LDCs.
Several empirical studies find that regime types have
little impact on income inequality (e.g., Bollen and
Grandjean 1981; Jackman 1974; Rubinson and

eunyoung ha
Quinlan 1977), and a few even find positive impacts
(Nel 2005). While electoral competition may provide
an opportunity for the introduction of the preferences of the broad public into politics, the mere
existence of electoral competition does not guarantee
greater representation for the poor or middle class. In
LDCs, the decisive voter is often not the median
income earner (or the median quintile) but the
richest quintile, which hence is the one that gains
most from the introduction of competitive elections,
fiscal redistribution, and economic liberalization in
general (Nel 2005).
Even in well-established democracies, leftist parties that represent the poor sometimes have limited
political power or none at all, and the median income
earner is rarely a net beneficiary of taxes and transfers
(Milanovic 2000). Why is this? First, political candidates often set their policy positions not in order to
appeal to the broader electorate but to serve smaller
primary constituencies, which provide them with
resources for campaigns (Fenno 1978). The poor or
underprivileged often lack the connections and funds
to effectively influence political candidates in this
way. Second, collecting information on the policy
positions of multiple political parties and candidates is costly for voters in terms of time and effort.
These costs are greater for citizens with lower levels
of income and education, who thus tend to vote
at lower rates and to be underrepresented in
the political system (Verba, Schlozman, and Brady
1995).
It has been noted already that redistribution does
not flow automatically from the introduction of
democracy, but must be targeted and worked for
specifically. The chronicle of this effort in advanced
countries forms the basis of a literature known as the
power resources theory or political class struggle
approach. It argues that the distribution of organizational power between labor organizations and left
parties on the one hand and center and right-wing
political forces on the other hand determines the
differences in the size and distributive impact of
welfare states across countries and over time (Huber
and Stephens 2001). According to this scholarship,
the upper class occupies a privileged position and has
extensive channels to influence political outcomes
(Lindblom 1977). Thus, to be successful in contests
over redistribution, the working and lower middle
classes need organizations that articulate their class
interests and can effectively mobilize the troops.
Several studies empirically demonstrate that the
strength of leftist parties in government, particularly
social democratic parties aligned with strong labor

globalization, ideology, and inequality

unions, are strongly associated with progressive taxes
and income transfers, and lower income inequality
(e.g., Esping-Andersen 1985; Garrett 1998; Huber
and Stephens 2001; Korpi and Palme 2003).
In light of the above, who governs (specifically, the
ideological orientation of the government) should be
considered as an important political determinant of
income inequality, above and beyond merely how a
government is established (the regime type of the
government). If so, the critical matter may not simply
be whether the mass electorate has the franchise, but
more importantly, what it does with it once gained.
Above all, the diversity of income distributions
among authoritarian regimes and democratic regimes alike is better explained by the ideology of
the particular state in which it is found than by the
process through which governing is carried out. The
lower strata of societies are likely to be better
protected by a government which assigns relatively
high priority to the protection of their interestsa
leftist governmentthan by a government which
favors growth without regard for its redistributive
consequencesa rightist government. This might be
true regardless of regime type. Authoritarian countries (provided their leadership is committed to leftist
ideology) may actually be more likely to redistribute
wealth to the poor or public than their rightist
counterparts in democratic regimes. For example,
socialist governments in Eastern Europe prior to the
fall of the Berlin Wall which were ideologically
committed to socialist contracts provided universal
social protections to their populations, despite their
authoritarian nature (Haggard and Kaufman 2008).
Recent empirical studies have in fact found that the
ideological orientation of government is strongly
associated with the welfare of the poor (Moon and
Dixon 1985) and with income inequality in Latin
American and Caribbean countries (Huber et al.
2006). Consistent with this, I would expect countries
with political leadership committed to redistribution
and economic equality to have less income inequality,
and this is one of the things I set out to test in
this article.
Yet this necessarily leads to a further question:
can the ideological preference of government parties
or chief executives survive under the pressure of
globalization? Several scholars have recently argued
that the separate and distinct policy preferences of
leftist (and rightist) governments have tended to
converge to conservative/liberal consensus under
the competitive pressure of economic integration
(e.g., Huber and Stephens 2001; Strange 1996).
According to them, generous welfare expenditures

545
and higher tax burdens prevent domestic producers
and investors from competing effectively with their
counterparts in the integrated world market. With
international capital mobility, mobile asset holders
can also move their assets to other countries with
lower taxes and a higher rate of return on investment.
To facilitate the price competitiveness of domestic
producers and maintain a business-friendly environment, leftist governments may cut tax burdens and
social programs even if otherwise inclined toward
pursuing their partisan objectives and progressive
redistribution policies. However, several other studies
on advanced economies demonstrate that government partisanship has still remained an important
determinant of social policies in the integrated world
market (Garrett 1998; Korpi and Palme 2003). This
research tests whether the policy impact of distinct
government ideological preferences on LDC income
distribution diminishes as market liberalization
increases.2

Data and Models for Analysis

Income inequality. The dependent variable,
income inequality, is measured by the Gini coefficient
(hereafter, Gini), which ranges from 0 (perfect equality) to 100 (perfect inequality). Gini data was
retrieved from the UNU-WIDER World Income
Inequality Database (WIID). The WIID is based on
2

This article focuses on if and how the impact of government

ideology on income distribution is constrained by globalization.
However, the redistributive policy of leftist/rightist governments
can also be significantly constrained by either internal or external
institutional constraints. Constitutional structure (i.e., veto
points) is considered to be an important determinant of redistributive policies and outcomes in advanced economies (Ha
2008; Huber and Stephens 2001; Tsebelis 2002). Although leftist
(or rightist) governments obviously wish to pursue their ideologically preferred redistribution policies, they are likely to be
particularly constrained when there are a relatively large number
of veto players in a countrys governing structure whose agreement is necessary to enact such policies. To test this possibility, I
created an interaction term between government ideology and
veto players, using Henisz (2002) veto points data (POLCON)
and DPI (2010)s checks and balances data, but I obtained no
significant results for the interaction terms.
Ties to international financial institutions, such as participating in IMF structural adjustment programs, might also significantly constrain LDC government welfare programs and enlarge
income inequality (Vreeland 2007). I extended Vreelands (2007)
data on IMF program participation to year 2005 and tested if the
impact of government ideology is constrained by IMF program
participation. None of these interaction terms were statistically
significant, nor do they have the expected positive signs. So, I
report only the interaction terms between government ideology
and globalization.

546
the high quality filtering of Deininger and Squire
(1996), which allows comparative studies for relatively large numbers of countries and years. (Online
Appendix 1 contains more information on the challenges of using Gini coefficients to compare income
inequality between countries.)
Globalization. To measure the degree of international market integration, I use two key measures
of contemporary globalization: trade flows (the sum
of imports and exports) as a share of GDP, and
foreign direct investment (FDI) as a share of GDP.
According to standard trade theory discussed above,
these globalization indicators are expected to be
negatively related with inequality in LDCs. On the
other hand, according to the technology-centered
globalization-inequality thesis, increased trade flows
and FDI are expected to increase skill premia, and
thus increase inequality.
Ideological orientation. The World Banks Database of Political Institutions (DPI) tallies the ideology of the three largest government parties and the
chief executive. It categorizes parties and chief executives by placing their preferences regarding state
control of the economy on a standard left-right scale,
and then assigning one of three values: Left, Center,
or Right.3 Parties and chief executives are coded
Right when the terms conservative or Christian
democratic appear in their names or the label
right-wing was found in the cross-check sources.
Similarly, parties are classified as Left if their names
show them to be communist, socialist, or social
democratic or if they are labeled as left-wing in
the cross-check sources. Parties are coded as Center when their names assert centrist affiliation or if
their position can be described as centrist, emphasizing the strengthening of private enterprise within a
social-liberal context but also supporting a redistributive role for government. All the cases which do
not fit into the categories above are treated as missing

3
Coding party ideology to three categories may be too coarse a
mesh to accurately capture reality. Unfortunately, alternative
party ideology data are not available for most LDCs. To check the
quality of the government-ideology data, I compared them with
the same measure based on two expert survey data; the left-right
party spectrum for advanced industrial countries (Castles and
Mair 1984) and five party classificationsleft, center-left, center,
center-right, and rightin Latin American countries (Coppedge
1997). I found that both measures are strongly correlated with
government-ideology data (r . 0.90 for Coppedges data and r .
0.60 for Castles and Mairs data). I also compared governmentideology data with the legislative partisan balance and executive partisan balance data of Huber et al.(2006). They are also
strongly correlated (r . 0.60).

eunyoung ha
(see Beck et al. 2001 and DPI 2010 for detailed
coding rules).4
The author compiled data on government ideological orientation following the coding rules of DPI,
but improved upon in three ways. First, the number
of government parties was increased from the three
largest parties to all of the parties in government.
Because many countries have more than three government parties that significantly affect government
policies, excluding the fourth or fifth largest government party, which may have only two or three seats
fewer than the third largest party, is likely to produce
significant measurement errors on government ideology scores. Second, I redefined government parties as
those with cabinet portfolios only and excluded any
parties that did not fit these criteria in the dataset.
While most government parties from DPI fit within
these criteria, the DPI sometimes includes indisputably nongovernment parties and contains missing
values in its cataloging of the partisan composition of
governments. For example, the DPI codes the Taiwan
Solidarity Union as a government party from 2002 to
2004 although it does not have any cabinet portfolios.
Last, to rectify the lack of government formation
dates in the DPI, I weighted the ideology data by
the duration of time each government spent in
power. This is a valuable added dimension because
two or three governments with different ideological preferences can coexist in the same year. The
dates of government formation are coded using
cabinet-formation dates or election dates when the
cabinet-formation dates are unavailable. (See online
Appendix 2 for the resources used for the data
expansion.)
Using the revised dataset, two separate measurements were created to capture the ideological orientation of LDC political leadership: government
ideology and chief executive ideology. When calculating
government ideology in coalition democracies, I treated multiple government parties as veto players. The
idea is that participation in a coalition government

Although the religious-secular dimension is an important

partisan distinction (Huber and Stephens 2001), religious parties
are weaker and more heterogeneous in LDCs (Mainwaring and
Scully 2003). Therefore, unless their ideological preferences are
clear in available resources, religious parties are coded as missing.
Regional and personalist parties are also treated as missing unless
their preferences for state control of the economy are available in
the resources.

globalization, ideology, and inequality

grants parties the right to veto legislation and
provoke a government crisis if they so wish, meaning all parties in a coalition government have opportunity to exercise veto power on policy decisions
(Tsebelis 2002:87). If the parties in the coalition
government have ideological differences, the government policy position will typically revert to the
common denominator among them. If a common
denominator cannot be found, the government coalition will dissolve, and a new government will be
formed.
The veto-player designation is important, because if all parties in a coalition government are veto
players, they should influence policy equally, irrespective of the number of seats they hold in the
legislature or government. This avoids any need for
the measure of government ideology to be weighted
according to seats held or other criteria and allows for
simple arithmetic averaging instead. For example, if
the coalition government is composed of one leftist
and one rightist party, government ideology becomes
center, regardless of the number of seats held by
the respective parties. If the coalition government is
composed of two leftist parties and one rightist party,
government ideology becomes more center-left.
Operationally, I first code the ideological positions
of the parties in government (left 5 1, center 5 0,
and right 5 1), sum them, and then divide by the
number of parties.
For authoritarian countries, government ideology
is measured in two ways. Such governments can
largely be divided into two categories, autocracies
with party systems and autocracies without party
systems (i.e., no parties are legally allowed). In the
first instance, government parties are used to calculate government ideology in the same way as with
democratic governments. When there are no parties,
the dictator is assumed to be the only veto player
in the system, and his/her ideology is used to calculate the government ideology.
Chief executive ideology is measured separately
from government ideology. Chief executive is defined
as a president in a presidential system, a prime
minister in a parliamentary system, and a dictator
in an autocratic regime. I constructed a separate
measure for chief executive ideology because executive leadership often plays a stronger role in shaping
government policies in LDCs: it might not be the
ideology of government parties but that of the chief
executive that matters for government distributive
policies. For example, while a president (or prime
minister) with rightist ideology may cooperate with a
center party in the business of governing, he/she may

547
still be able to employ rightist government policies
rather than center-right ones.5
Controls. To isolate the effects of globalization
and government ideology, I also include several
important control variables that are likely to affect
income inequality. First, the presence of democratic
processes may channel the preferences of mass
publics to more equal distributive policies. Democracy is measured by a dichotomous classification of
the political regime, coding 1 for democracies and 0
for the residual category of authoritarian regimes.
The measure and classification are drawn from
Cheibub (Cheibub, Gandhi, and Vreeland 2010),
who use a minimalist definition of democratic
regimes which defines them as regimes in which
citizens are periodically given the opportunity to
choose their leaders in electoral contests, they are
presented with more than one alternative, and the
winners become the countrys leaders. This minimalist concept of democracy avoids most of the theoretical issues that animate empirical research on political
regimes, particularly those questions about the level
or length of a countrys democratic experience
(Cheibub, Gandhi, and Vreeland 2010).
Second, the relationship between development
and inequality is likely to be curvilinear with an
inverted U-shape: inequality is expected to increase
when development is in an early stage, i.e., when
GDP per capita is low, but then decrease when the
economy is fully developed (Kuznets 1955). Thus,
GDP per capita and (GDP per capita)2 are included
and expected to have positive and negative coefficients, respectively.6 Third, short-term economic

5
Because the ideological positions of nongovernment parties
(except the largest opposition party) are not available in DPI,
the organized power of the left is measured only with the
ideological positions of government parties. Because previous
studies (e.g., Huber, Ragin, and Stephens 1993) have consistently
found that the long-run partisan character of government is a
better predictor of welfare state generosity than left voters, left
seats in parliament, or union organization, government ideology
is a good proxy for the political power of the left. However, this
article measures the current partisan character of government
instead of its long-run counterpart. This is because it seeks to
contribute to the current globalization debate by testing if the
ideological preference of current incumbent government parties/chief executives shapes current income distribution in LDCs,
and if this impact has declined under the constraint of market
liberalization.
6
(GDP per capita)2 is highly correlated with GDP per capita (r .
0.90). Yet, the main results in this article are robust even when
the squared term is excluded from the model.

548
growth, measured by annual percentage in change of
real GDP may reduce income inequality, because
growth is likely to reduce poverty (Ross 2006).
Fourth, population growth is expected to increase
income inequality in LDCs. An increase in the
population leads to an increase in the population of
younger (relatively unskilled) workers, which creates
a surplus of unskilled labor and widens the wage gap
between skilled and unskilled workers in LDCs
(Alderson and Nielsen 1999). Fifth, education, measured by secondary-school enrollment as a share of the
secondary-school age population, is expected to
reduce inequality by increasing the supply of more
skilled (educated) workers and thereby reducing their
received wage premium in response. Finally, if a
society is fractionalized according to language, race,
and religion, it is likely to be more averse to
redistributive politics (Alesina, Baquir, and Easterly
1999). Accordingly, ethnic diversity, the sum of three
indices, racial division, national language division,
and religious division (Vanhanen 1999), is expected
to be negatively associated with income inequality.
Models. In this article, I build a series of regression estimates of income inequality between 1975 and
2005 for 59 developing countries in order to explain
cross-national and longitudinal variation in income
inequality. As in other large-N studies involving
LDCs, annual data are available only for a few
variables, countries, and years, and those missing
are often authoritarian countries with favorable
economic performance (Ross 2006). Therefore, the
observations in my analysis are for five-year country
averages (197579, 198084, 198589, 199094,
199599, and 200005). While a lagged dependent
variable has popularly been used in studies of
inequality (e.g., Reuveny and Li 2003), other authors
such as Achen (2000) and Plumper, Troger, and
Manow (2005) have argued that a lagged dependent
variable biases significant independent variables
downward, and instead they recommend adjusting
for serial autocorrelation using an AR(1) process.
Following Beck and Katzs (1995) recommendation, I
use panel-corrected standard errors to correct panellevel heteroskedasticity and contemporaneous spatial
correlation, and I use an AR(1) process to adjust for
serial correlation. Decadal dummies are included to
control unmeasured period-specific effects such as
global economic fluctuations, like the oil crisis in the
1970s. Country dummies are also included to control
for unmeasured country-specific effects, such as longterm political history and the size of population and
territory. In all, the model to be tested can be written
as follows:

eunyoung ha

Income inequalityi;t b1 Trade b2 FDI

b3 Ideological orientation
b4 Democracy
b5 GDP per capita
b6 GDP per capita2
b7 GDP growth
b8 Population growth
b9 Secondary education
b10 Ethnic diversity
Sj bj Decade
Sk bk Country
mi;t
The model is used to analyze the effects of globalization and government ideology on income inequality.
As discussed above, globalization is represented by
trade and FDI, and ideological orientation is the
ideological position of the government parties or chief
executives. In each equation, income inequality is
measured via Gini coefficients. The subscripts i and
t denote, respectively, the country and 5-year average of
the observations. The j and k indicate, respectively, the
decadal dummies and country dummies. In identifying
the model, the intercept is suppressed.

Results of Pooled Time-Series

Regression Analysis
My results are summarized in Tables 1, 2, and 3. Table 1
shows that both trade flows and FDI (the two globalization variables) are strongly associated with higher
income inequality. On the other hand, leftward movement of both government ideology and chief executive
ideology are significantly associated with lower income
inequality. The results are substantively meaningful.
According to the result in regression (1), if a developing
country enlarges trade flows (% GDP) by 38.31 (one
standard deviation), then it is likely to increase income
inequality by 1.15 (2.71% of the average Gini in the
sample countries). If a developing countrys FDI (%
GDP) increases by 2.31% (one standard deviation),
then it is likely to enlarge income inequality by 1.08
(2.55% of the average Gini in the sample countries).
When a government shifts its ideological position from
rightist to leftist, it is likely to enhance income inequality by almost 3.25 (7.66% of the average Gini).
The control variables show that the level of
income inequality is driven not only by deliberate

globalization, ideology, and inequality

T ABLE 1

549

The Impact of Globalization and Government Ideology on Income Inequality in LDCs,

19752005
Ideological Orientation Measured by
Government Ideology
[1]

Globalization
Trade flows (% GDP)
FDI (% GDP)
Ideological Orientation
Government ideology
1 (right) to 1 (left)
Chief executive ideology
1 (right) to 1 (left)
Controls
Democracy
GDP per Capita
(GDP per Capita)2
Economic growth
Secondary education
Population growth
Ethnic diversity
No. of observations
R-squared
Prob. . Chi-squared

Chief Executive Ideology

[2]

[3]

0.030*
0.467**

(0.022)
(0.213)

0.026*
0.476**

(0.021)
(0.208)

-1.623**

(0.838)

-1.856**

(0.958)

0.446
0.001***
-7.71e08***
0.126***

165
0.995
0.000

(1.187)
(0.0003)
(1.46e08)
(0.050)

0.388
(1.102)
0.001***
(0.0003)
-8.08e08*** (2.23e08)
0.270**
(0.135)
0.005
(0.041)
-0.600
(0.795)
0.266***
(0.026)
159
0.995
0.000

[4]

0.049**
0.496***

(0.025)
(0.192)

0.047**
0.523***

(0.023)
(0.173)

-1.455***

(0.365)

-1.419***

(0.540)

0.711
0.001***
-7.56e08***
-0.004

(1.264)
(0.0004)
(2.33e08)
(0.037)

0.650
0.001***
-8.31e08***
0.087
-0.005
-0.559
0.236***
148
0.996
0.000

(1.163)
(0.0004)
(3.17e08)
(0.105)
(0.045)
(1.063)
(0.044)

152
0.996
0.000

Note: (1) The dependent variable is the Gini coefficient. The Gini coefficient ranges from 18.64 to 72.02 with a mean 5 42.38 and a
standard deviation 5 12.42. See Appendix 1 for detailed variable descriptions. (2) The estimation is by least squares with standard
errors corrected for panel heteroskedasticity. (3) The parentheses denote a panel-corrected standard error (adjusted for
heteroskedasticity and contemporaneous correlation). Each regression also includes decadal dummies and country dummies
(not shown for space), and the constant variable is suppressed. (4) Statistical significance is based on one-tailed tests. *** p , 0.01;
** p , 0.05; * p , 0.10.

change in government policy, but also by adjustments

resulting from changes in economic conditions and
ethnic diversity. The control variables strongly support the idea of the Kuznets curve: GDP per capita
and (GDP per capita)2 have a positive and negative
relationship with income inequality, respectively,
meaning that income gaps increase in early stages
of LDC development but decrease as the economy
fully develops. While inconsistent, short-term economic growth shows some positive association with
income inequality. Rapid economic growth in LDCs
seems to benefit the rich proportionally more than
the poor. Ethnic heterogeneity is consistently and
positively associated with inequality, implying that
larger income gaps exist alongside larger racial,
linguistic, and religious divisions. On the other hand,
the existence of democratic processes, population
growth, and secondary education has little association with income inequality in LDCs.
Not only does government ideology directly
affect income inequality, but it may also indirectly

mediate the impact of external pressures on income

distribution: leftist governments may moderate the
enlarged income gaps produced by market integration compared to rightist counterparts. Table 2
reports the interactive effects of globalization and
government ideology (trade3government ideology,
FDI3government ideology, trade3chief executive
ideology, and FDI3chief executive ideology) on income
inequality. In regressions (5) and (6), trade flows are
strongly and positively related with income inequality, but the interaction term between trade and
government ideology (trade3government ideology) is
strongly and negatively associated with inequality.
The results suggest again that trade flows have
significantly enlarged income inequality in LDCs,
but that the enlarged income gaps narrow when the
government in power is more left-oriented.
While the coefficient and standard error estimates presented in the table give us a first look at the
interactive impact of globalization and government
ideology on inequality, the appropriate test for an

550
T ABLE 2

eunyoung ha
The Interactive Impact of Globalization and Government Ideology on Income Inequality in
LDCs, 19752005
Ideological Orientation Measured by
Government Ideology
[5]

Globalization
Trade flows (% GDP)
FDI (% GDP)
Ideological Orientation
Government ideology
1 (right) to 1 (left)
Trade3government ideology
FDI3government ideology
Chief executive ideology
1 (right) to 1 (left)
Trade3chief executive
ideology
FDI3chief executive
ideology
Controls
Democracy
GDP per Capita
(GDP per Capita)2
Economic growth
Secondary education
Population growth
Ethnic diversity
No. of observations
R2
Prob. . Chi-squared

0.034**
0.465**

Chief Executive Ideology

[6]

(0.018)
(0.211)

0.030*
0.479***

[7]
(0.019)
(0.204)

-0.600

(0.900)

-0.646

(0.959)

-0.018***
0.137

(0.006)
(0.256)

-0.020***
0.112

(0.005)
(0.281)

0.162
0.001***
-7.61e08***
0.116**

165
0.995
0.000

(1.141)
(0.0002)
(1.40e08)
(0.058)

0.064
0.001***
-7.69e08***
0.256**
0.004
-0.612
0.273***
159
0.995
0.000

(1.056)
(0.0003)
(2.58e08)
(0.130)
(0.036)
(0.801)
(0.023)

0.050***
0.546**

[8]
(0.019)
(0.267)

0.049***
0.598**

(0.017)
(0.261)

-0.483

(0.997)

-0.272

(0.849)

-0.012

(0.015)

-0.012

(0.014)

-0.081

(0.347)

-0.149

(0.372)

0.492
0.001***
-6.61e08***
-0.014

(1.157)
(0.0004)
(2.27e08)
(0.044)

0.465
(1.063)
0.001***
(0.0004)
-7.11e08 *** (3.07e08)
0.073
(0.092)
-0.012
(0.034)
-0.513
(1.040)
0.261***
(0.028)
148
0.996
0.000

152
0.996
0.000

Note: (1) The dependent variable is the Gini coefficient. The Gini coefficient ranges from 18.64 to 72.02 with a mean 5 42.38 and a
standard deviation 5 12.42. See Appendix 1 for detailed variable descriptions. (2) The estimation is by least squares with standard
errors corrected for panel heteroskedasticity. (3) The parentheses denote a panel-corrected standard error (adjusted for
heteroskedasticity and contemporaneous correlation). Each regression also includes decadal dummies and country dummies
(not shown for space), and the constant variable is suppressed. (4) Statistical significance is based on one-tailed tests. *** p , 0.01;
** p , 0.05; * p , 0.10.

interactive model is to look at the specific shape of

the 95% confidence interval (Brambor, Clark, and
Golder 2006). Figure 1(a) depicts the conditional
effect of trade flows on inequality. The figure graphically illustrates the finding that trade has an increasing effect on inequality, but that as government
ideology moves from rightist to leftist, the income
gaps produced by trade flows decline. The size and
significance of the income gaps increased by trade
are largest under fully rightist government, but become insignificant under centrist/leftist government.
Although the interaction terms between the globalization variables and chief executive ideology are
statistically insignificant, Figure 1(b) demonstrates
that chief executive ideology also can significantly
mitigate the expansionary pressure of trade flows
on income inequality in LDCs. As chief executive
ideology moves from rightist to leftist, the increasing

income gaps generated by trade flows decline and

become insignificant.
Table 3 reports robustness tests of the main
empirical results. Regressions (9) and (10) test the
results with an alternative measure of government
ideology: left%. This measure assumes that parties
with more seats exercise more power in the government in terms of policy outcomes. For example, if
leftist parties in a coalition government have 90% of
the seats, it is assumed that the government will steer
90% leftist on policy decisions. In general, the leftist
share of government would ideally be measured by
leftist parties share in government (i.e., share of total
government portfolios) or in the legislature (i.e.,
share of total seats in the legislature). Unfortunately,
such data for government portfolios and opposition
parties ideology is unavailable for most LDCs.
Therefore, I employ an alternative measure: leftist

globalization, ideology, and inequality

T ABLE 3

551

Robustness Tests
Left %

Globalization
Trade flows
(% GDP)
FDI (% GDP)
Political Conditions
Government
ideology
1 (right) to 1 (left)
Trade3government
ideology
FDI3government
ideology
Left%
0 to 100
Trade3Left%

[9]

[10]

0.024
(0.020)
0.461**
(0.214)

0.033**
(0.018)
0.659***
(0.245)

Age of Democracy

[11]

[12]

0.026
(0.022)
0.329*
(0.257)
-1.676**
(0.952)

-0.029***
(0.012)

0.402
(1.122)

[14]

[15]

[16]

0.028*
(0.021)
0.344*
(0.266)

0.025
(0.023)
0.481***
(0.198)

0.028*
(0.021)
0.479***
(0.195)

0.045***
(0.015)
0.509***
(0.179)

0.038*
(0.024)
0.831***
(0.168)

-1.043
(1.155)

-1.819**
(1.028)

-0.666
(0.957)

-1.724**
(0.853)

1.018
(1.882)

-0.020***
(0.005)
0.117
(0.309)

0.0001
(0.014)
-0.0003**
(0.0001)
-0.004
(0.005)
0.258
(1.087)

Polity

0.267***
(0.084)

-0.011
(0.024)

159
0.995
0.000

157
0.995
0.000

1.497*
(0.962)

1.519*
(1.043)

0.148*
(0.107)
108
0.994
0.000

0.130
(0.118)
108
0.995
0.000

-0.006
(0.027)

Past inequality
159
0.995
0.000

-0.018
(0.026)
-1.046***
(0.370)

0.233***
(0.096)

Age of democracy

No. of observations
R-squared
Prob. .
Chi-squared

Lagged Dependent
Variable

[13]

-0.012**
(0.007)
0.110
(0.270)

FDI3Left%
Democracy dummy

Polity

157
0.995
0.000

159
0.995
0.000

159
0.995
0.000

Note: See note in Table 1. Control variables, decadal dummies, and country dummies are not shown due to space constraints. The
constant variable is suppressed. Statistical significance is based on one-tailed tests. *** p , 0.01; ** p , 0.05; * p , 0.10.

government parties seats in the legislature as a share

of all government parties seats in the legislature. The
results support my substantive conclusions: stronger
leftist power in government is associated with lower
inequality, and it moderates the inequality otherwise
enlarged by globalization.
Regressions (11)(14) test the results using two
alternative measures of democracy: the level of the
democracy and the age of the democracy. First,
following the precedent of many other studies on
democracy and income inequality, the level of democracy, here called polity, was measured as the
difference between the democracy index and the
autocracy index in the dataset Polity IV and ranged
from 10 (representing the most autocratic regimes)

to 10 (the most democratic regimes; Marshall and

Jaggers 2008). Contrary to the general expectation,
polity is strongly and positively associated with
income inequality (regressions [11] and [12]). This
result suggests that the richest quintile of the population often gains the most from the introduction of
competitive elections in LDCs, which is consistent
with the work of other scholars (e.g., Nel 2005).
Regressions (13) and (14) also shows that the length
of democratic historythe age of democracyhas no
significant impacts on inequality. While not reported,
I checked if democracy has a parabolic relationship to
income inequality (following Burkhart 1997 and
Rudra 2008) by including a democracy measure
(democracy dummy, polity, or age of democracy)

552

eunyoung ha

F IGURE 1 Marginal Effects of Trade on Income Inequality (Gini)

and its squared term in my regressions. However, the

results did not follow the expectation, and the
squared terms did not have any statistical significance. I also checked for any endogeneity problems
between the democracy and inequality variables, but
a Durvin-Wu-Hausman test did not indicate any.
Income inequality may depend on the level of
past inequality rather than contemporary government ideology. However, even when past inequality is
considered, government ideology is still strongly and
negatively associated with income inequality, and its
interactions with globalization variables are negatively
related with inequality (see regressions [15] and [16]).
Based on previous literature, I also tested the results
with a large number of other control variables, including terms of trade, budget deficits, inflation, population
size, unemployment rate, potential labor power (Rudra
2008), urbanization, economic structure (i.e., size of
agricultural sector), and oil exports. Most of these
controls were excluded from the final model to avoid
problems of multicollinearity and to enhance the
completeness of data coverage and clarity of presentation. It should be emphasized that none of the controls
excluded from the final reports altered any of my basic
substantive findings.

Discussion and Conclusion

This article theoretically and empirically evaluates the
impact of globalization and government ideology on

income inequality in LDCs and yields the following

conclusions. First of all, the findings are in accord
with technology-centered globalization-inequality
thesis, i.e., that increased trade flows and FDI have
expanded income inequality in LDCs. On the other
hand, governments with leftist parties and chief
executives have significantly mitigated income gaps
and have in fact moderated the expansionary pressure
of the integrated world market on income inequality,
compared to their rightist counterparts. These findings lend support to the notion that redistribution
from rich to poor is a more explicit concern of the
left than of the right, since left-leaning governments
are more successful in mitigating income inequality.
Still, these results raise questions, particularly
given that several leftist governments in LDCs have
recently liberalized their domestic markets, privatizing
state-owned enterprises and deregulating industries.
Can leftist governments continue to pursue redistributive policies under the competitive pressures of an
integrated world market? Perhaps some answers can be
gleaned from the political economy of advanced
industrial countries. In the liberal international order
after World War II, the advanced countries had to
liberalize their markets to promote economic growth,
but provided social services to compensate those who
were harmed and dislocated by the process (Ruggie
1982). The strength of leftist parties in government
played a critical role in determining the extent and
depth of this redistribution.
Most governments in LDCs are now confronting
similar situations. Increased trade and FDI are

globalization, ideology, and inequality

pursued to promote economic growth and improve
national welfare (Makki and Somwaru 2004). Citizens in LDCs also strongly support free trade,
multinational corporations, and free markets (PRC
2007). In this political environment, protectionism is
not a viable option for governments to pursue.
Nonetheless, the rise of inequality under the competitive international market leaves us wondering
whether LDC governments are willing and able to
provide the same quality of redistribution their
wealthy counterparts did to smooth the process
along. This question is a prominent one in the minds
of citizens in LDCs, who are concerned about
increasing inequality despite their general support
for globalization (PRC 2007).
Ironically, rising inequality coupled with this
concern about globalization provides fertile grounds
for leftist governments to maneuver. In fact, it seems
that leftist parties in LDCs have been strengthened
electorally to the extent they can effectively articulate
concerns about the social deficits of market liberalization. Recent leftist electoral victories in Latin
America have been attributed to the electorates
search for a refuge in left-leaning governments from
widespread insecurity. In keeping with the results of
this article, recent studies on LDCs also show that
voters support leftist governments more under conditions of market liberalization, as leftist governments
are demonstrably more inclined to respond to demands for redistribution and expanded public expenditures (Kim 2010; Stokes 2009).
If leftist governments redistributive policies can
only achieve equality at the cost of hampered economic growth, they will eventually be forced to return
to conservative/liberal policies and accept greater
inequality in return for growth. On the other hand,
inequality in itself is a significant barrier to economic
growth. Increasing income gaps between rich and poor
produce social tension, conflict, and instability, all of
which hinder economic growth (Alesina and Perotti
1996). In this regard, it is leftist governments that
(somewhat ironically) may ultimately be more suitable
for fostering successful globalization, despite their
constraints by growth concerns. Although outwardly
more compatible with economic liberalization, the
evidence suggests rightist governments do so at the
cost of inequality-enhancing outcomes, which may
be ultimately counterproductive to continued economic liberalization. However, leftist government
policies require the fiscal capacity to maneuver, which
requires growth, which requires liberalization. This
leads to the final conclusion that, in the global era, the
distinct policies and preferences of leftists, centrists,

553
and rightists alike will continue to be closely interrelated with each other.

Acknowledgments
For help with various aspects of this article, I am
grateful to Acir Almeida, Puspa Amri, Rachelle
Andrus, Richard Baum, Lisa Blaydes, Jose Antonio
Cheibub, Seung-whan Choi, Geoffrey Garrett, Barbara
Geddes, Tasos Kalandrakis, Brett Kocher, Edward
Leamer, Dong-wook Lee, Melissa Rogers, Ronald
Rogowski, Jae Hyeok Shin, George Tsebelis, the
editors, and three anonymous reviewers.

Appendix 1. How Income Inequality

was Measured
While the Gini coefficient (hereafter, Gini) is probably the most used measure of income inequality, it is
difficult to compare one Gini with another, because
the methods used to compute Gini can differ in
various ways, including the concept being measured
(income inequality versus consumption inequality),
the measure of income (gross versus net), the unit of
observation (individual versus household), and the
coverage of the survey (national versus subnational).
First of all, income-based measures are bound to
show higher inequality than consumption-based
measures. Even when income is unusually low for
some households and high for others, consumption
will be more equal because of the consumptionsmoothing opportunities provided by saving or borrowing. Second, gross income-based measures should
yield higher inequality than net income-based measures due to the potential for redistribution through the
tax system. Welfare will differ prior to or following the
individuals payment of taxes and receipt of benefits.
Therefore, the difference between the gross and net
income can be significant in progressive tax systems.
Third, individual-level measures may report higher
inequality than household-level measures, because
households may contain more than one wage-earning
member (and are more likely to do so when individual
incomes are lower). Household-level measures are thus
considered the better measure of welfare, but the
household-level measures need also be weighted by
aggregate household size. Finally, the quality of the
survey varies across countries because some countries
conduct their survey only on the subnational level
(Deininger and Squire 1996).

554
To overcome these problems, Deininger and
Squire (1996) compiled master statistics on household income inequality. They first assembled as many
income distribution variables as possible, and then
filtered out the observations that did not satisfy three
minimum standards for high-quality: (1) the data
must be based on household surveys; (2) the population covered must be representative of the entire
country; and (3) the measurement of income/consumption must be comprehensive, including income
from self-employment, nonwage earnings, and nonmonetary income. To adjust for the differences between
income-based and consumption-based measures, they
also systematically increased all consumption-based
measures by 6.6 points, the average difference between
income-based and consumption-based Ginis.
The recent Standardized World Income Inequality Database (SWIID) assembled by Stolt (2009)
covers the largest possible number of countries
(n 5 153) and years (t 5 45). SWIID uses a fiveyear weighted moving average of inequality to generate its data; it is premised on the assumption that
near-time estimates of inequality will vary only
moderately from each other; and it reports counterinstances as errors. By so doing, however, the SWIID
generates overestimates of inequality before major
political transitions and underestimates inequality
after them. For this reason Solt (2009) does not use
this moving average during the transition period of
Eastern Europe and the Soviet Union.
Because the present study tries to capture the
changes of inequality associated with political transitions, this paper measures inequality with WIID,
which does not treat the dramatic yearly differences in
inequality as errors. When SWIID is used, the results
for chief executive ideology still hold (p , 0.01), while
those for government ideology become statistically
insignificant, though with the same negative signs
(p , 0.15).

Appendix 2. Resources Used to Code

the Ideology of Governments and
Chief Executives
To obtain data on government party composition
and distribution of legislature seats, I used two
resources. First, I generally coded the partisan composition of government using the Database of Political Institutions (DPI) from the World Bank (2010). I
also used the Political Handbook of the World (various

eunyoung ha
years), Europa World Year Book (various years),
Keesings Contemporary Archives (various years), the
Global Database of Political Institutions and Economic
Performance by Cheibub and Tasos (not publicly
available at present), Party Government in 48 Democracies (19451998) by Woldendorp, Keman and
Budge (2000), the ZPC collection World Political
Leaders 19452011 (available at http://www.terra.es/
personal2/monolith/00index.htm), Regional Surveys
of the World by Europa (various years), and the
Election Results Archive from the Center on Democratic
Performance (available at http://cdp.binghamton.
edu/era/countries). Second, I coded the partisan
composition of European countries using the Political Data Yearbook in the European Journal of
Political Research (various years), the ZPC collection
European Governments (available at http://www.
terra.es/personal2/monolith/00europa.htm), and the
Handbook of Political Change in Eastern Europe by
Berglund, Ekman, and Aarebrot (2004). The partisan
composition of Latin American countries was crosschecked with Latin American coalition government
data by Acir Almeida (not publicly available at
present).
DPI determines whether the orientation of a
party was immediately obvious from its name or its
description in the Political Handbook of the World.
Then, the data was cross-checked with the European
website Agora Telematica, edited by Wilfried
Derksen, as well as with the findings of several other
publications: Political Parties of Africa and the Middle
East by East and Joseph (1993), Political Parties of
Eastern Europe and the Successor States by Szajkowski
(1994), and Expert Interpretations of Party Space
and Party Locations in 42 Societies by Inglehart and
Huber (1995).
To code governing parties not described in the
DPI, I incorporated coverage of Latin American party
ideology using codes from Coppedges (1997) A
Classification of Latin American Political Parties.
For this dataset, 53 country specialists code parties in
11 Latin American countries from the early 1900s to
the mid-1990s. Second, the ideological positions of
parties in central and east European countries were
based on Klingemann et al.s (2006) party manifesto
dataset. Because this dataset covers elections only in
the early 2000s for 24 Central and East European
countries, few changes were introduced by the comparison. Finally, the data was cross-checked and
additionally expanded with Leftist Parties of the World
(available at http://www.broadleft.org), Wikipedia
(available at http://en.wikipedia.org/wiki/List_of_
political_parties), the Hutchinson Encylopaedias

globalization, ideology, and inequality

Appendix 3

555

Average Income Inequality (Gini), 19752005

Average
Average
Average
Average
Average
Average
Country Name (1975-2005) (1975-1989) (1990-2005) Country Name (1975-2005) (1975-1989) (1990-2005)
Bahamas
Bangladesh
Bolivia
Brazil
Bulgaria
Burkina Faso
Cambodia
C. African Rep.
Chile
China
Colombia
Costa Rica
Czech Rep.
Ecuador
Egypt
Estonia
Gambia
Ghana
Guinea
Guinea-Bissau
Guyana
Honduras
Hungary
India
Indonesia
Jamaica
Jordan
Kenya
Lao PDR
Madagascar

45.33
33.41
54.14
58.72
31.87
69.19
39.78
63.20
56.12
32.92
54.37
47.02
21.90
57.93
42.89
37.55
67.90
42.74
60.56
48.07
53.64
55.45
23.49
31.55
35.79
47.86
39.64
56.66
30.40
46.13

46.51
33.35
n.a.
58.36
23.13
n.a.
n.a.
n.a.
53.28
31.28
52.85
46.91
20.70
n.a.
n.a.
n.a.
n.a.
44.06
n.a.
n.a.
n.a.
58.13
21.93
31.68
34.88
46.83
38.45
n.a.
n.a.
n.a.

42.99
33.50
54.14
59.08
40.60
69.19
39.78
63.20
57.07
36.20
55.38
47.14
23.70
57.93
42.89
37.55
67.90
42.09
60.56
48.07
53.64
54.11
25.84
31.34
37.16
48.20
42.03
56.66
30.40
46.13

Country Facts (available at http://www.talktalk.co.

uk/reference/encyclopaedia/hutchinson/index_a.html),
Armingeon and Carejas (2004) Comparative Data Set
for 28 Post-Communist Countries, 19892004, the
Handbook of Political Change in Eastern Europe and
BBC news (available at http://news.bbc.co.uk/2/hi/
middle_east).
While most of the sources code leftist/rightist
parties in similar ways, the codes are sometimes
mixed for center parties (i.e., center-left, center, and
center-right). In my dataset, I code center-left and
center-right parties as left and right parties, respectively. This means that if the ideological positions of
center-left and center-right parties are actually closer
to the center, this coding may create some measurement errors. To check the robustness of the results
using this government ideology classification, I created a conservative measure of government ideology
which excludes governments with these problems.

Malaysia
Mali
Mauritania
Mauritius
Mexico
Mongolia
Morocco
Nicaragua
Niger
Pakistan
Panama
Peru
Philippines
Poland
Romania
Russian Fed.
Senegal
Slovak Rep.
Slovenia
South Africa
Sri Lanka
Taiwan
Tanzania
Thailand
Turkey
Uganda
Venezuela
Yemen, Rep.
Zambia

48.71
64.56
63.00
40.67
52.67
33.20
38.00
50.30
42.95
33.64
54.59
46.96
46.94
27.47
26.93
29.75
48.15
20.92
23.65
57.66
43.55
29.93
45.58
50.28
46.58
43.75
44.06
39.50
55.96

49.13
n.a.
72.02
42.67
50.67
n.a.
39.19
n.a.
n.a.
34.05
52.04
46.05
45.24
24.66
23.38
25.72
n.a.
20.26
n.a.
n.a.
40.13
28.95
n.a.
47.29
44.16
33.00
43.45
n.a.
51.00

48.08
64.56
53.99
36.69
54.68
33.20
37.40
50.30
42.95
33.02
56.29
47.87
48.64
31.70
28.71
35.79
48.15
21.86
23.65
57.66
48.97
31.40
45.58
53.28
49.00
49.12
44.67
39.50
58.45

This conservative ideology measure was also strongly

and negatively associated with income inequality.

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Eunyoung Ha is an Assistant Professor at Claremont Graduate University, Claremont, CA, 91711.

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