Income Distribution, Democracy and Globalization: An Empirical Analysis for Turkish Economy

The question of how to ensure a fair welfare distribution gains importance in today's economies where income distribution is gradually deteriorating. In this manner, besides macro variables, the effects of institutional transformations such as democratization and globalization come into question. In this study, it is intended to determine the relationship between income inequality and openness and democracy for the 1987-2017 period in Turkish economy. Although it has rapidly integrated to the global economy over the last three decades, Turkish economy has experienced deterioration in income distribution. The main objective of the study is to determine how openness and democracy effect on income distribution. Gini coefficient was used as income distribution indicator, democracy index, trade openness, globalization index, education and per capita income indicator were used as independent variables. The model was estimated with the ARDL bounds test approach, and it was found that there was a significant relationship with the variable of democracy and globalization, and there is no relationship with the trade openness. According to the results of the study, while democracy and globalization have positive effects on income distribution in the long run, they have a negative effect in the short run.