The purpose of this study is to examine influence of government intervention on inequality in developmental states. We distinguished inequality from two dimensions such as economic and social inequality.
And to explain the difference in the degree of inequality, this paper suggest four theoretical perspectives such as economic development or modernization theory, the theory of political democracy, world economy system theory and Keynesian theory of political economy. Results of analysis are following; first, observing the distribution per country on relationship between economic inequality and social inequality, countries having both higher level of economic inequality and higher social inequality than the average of all countries are mostly Latin America countries.
On the other hand, countries having both lower economic inequality and social inequality than the over all average are mostly Eastern Europe countries. In addition, particular fact is that Latin America countries have higher economic inequality than other countries compared to social inequality whereas Asia countries have more critical level of social inequality than economic inequality.
Second, as a result of conducting panel regression analysis with fixed effect model applied for factors having influence on economic inequality and social inequality, it is found that factors having influence on each type of inequality are different. However, empirical analysis shows that the alleviation of both economic and social inequality is positively affected by government intervention.
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