Party Dynamics and Economic Inequality in Taiwan, 1978-2020





Published date: 

June, 2023


Yi-Bin Chang


The goal of this research is to test an empirical model of distributional outcomes that explores the impact of aggregate level of political dynamics. This paper addresses on the central questions: Do national election outcomes influence distributional outcomes? The arguments suggest that when the political landscape changes – a different party takes over the presidency, the ideological direction of public policy shifts, or the mood of the public changes – income inequality responds in consistent and predictable ways. Shifts to the left produce more egalitarian outcomes and shifts to the right exacerbate existing inequality. Economic conditions matter for distributional outcomes, but political dynamics matter as much. The influence of politics, de facto, manifests itself in some surprising ways. This paper demonstrates that government to influence distributional outcomes via explicit redistribution, but government also shapes income inequality by conditioning market outcomes. In fact, this mechanism of distributional impact is as strong as redistribution.