A new EBRD Working Paper (number 248)
The linkage between income inequality and citizens’ support for democracy has widely been discussed in the literature (e.g. Acemoglu and Robinson, 2001; Andersen, 2012). However, drawing inequality can further be decomposed into two components drawing on the theory of inequality of opportunity (IOp) proposed by Roemer (1998). Inequality arising due to differences in effort is perceived as ”fair”, while inequality due to differences in circumstances (e.g. unequal starting conditions) is regarded as ”unfair”. Using multiple state-of-the-art estimation methods, comparable IOp measures for 27 former communist countries (”transition countries”) and 3 Western democracies are calculated. Incorporating these IOp measures into the individual-level attitude formation process reveals that higher levels of IOp correspond to higher levels of support for the concept of democracy while overall income inequality has no statistically significant effect. This observation can be rationalized by citizens regarding democracy as a means to achieve equality of opportunity rather than simply as a vehicle for redistribution.