Where Do Losers Lose the Least?

Regime Type and the Unequal Gains from Trade

Lauren Allen & Sylvia Cesar

As a country opens its economy to trade, will income inequality be ameliorated? Do these effects depend on regime type?

Hypothesis: democracies are better at redistributing the losses and gains from trade

Trade & Inequality

● Heckscher-Ohlin Model

○ Stolper-Samuelson effect

● Ambiguous effects

Democracy & Inequality

● Governments’ incentives and staying in power

● Median voter

● Government Ideology

Methodology

• Income distribution• SWIID Gini coefficient (post-tax)

Methodology

● Economic Globalization○ Axel Dreher 2006

● Regime Type○ DD Dichotomous indicator (1-0)

Conclusion

● Regime type and inequality● Regime type and welfare● Malapportionment and welfare

Further Research● Robust testing: Country Fixed Effects● Theory:

○ Autocracies’ incentives to provide welfare