Do Middle Classes Bring Institutional Reforms?

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ABSTRACT:We revisit the link between poverty, the middle class and institutional outcomes using a
newly developed cross-country panel dataset containing detailed information on the
distribution of income and expenditures. When the size of the middle class increases
(measured as the proportion of people with income above 10 US Dollars a day in PPP
terms), social policy on health and education becomes more active and the quality of
governance regarding democratic participation and official corruption improves. This does not
occur at the expense of economic freedom, as an expansion of the middle class also implies
more market-oriented economic policy on trade and finance. The impact of a larger middle
class appears to be more robust than those of lower poverty, lower inequality, or higher GDP
per capita.

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关键词：middle class Institution Reforms classes Middle developed education regarding detailed official

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