Enfranchisement, Democracy and Income Inequality: A Theoretical Model and Evidence from Iran

Inequality in income and wealth distribution as the most critical socioeconomic indicator is highly influenced by political structure. In the recent centuries, democratization along with enfranchisement has caused a course of economic changes including income and wealth redistribution. This study uses a neoclassical microeconomic approach for a hypothetical economy and demonstrates how to being affected incomes inequality and redistribution by enfranchisement in a society whose economic and political power pillars are under control of aristocrats. Theoretical analysis suggests that expansion of democracy leads to less inequality in incomes. Empirical evidence from Iran for the period 1969-2008 indicates that democracy can be a significant determinant in income redistribution.