B and that the higher _r_ , the bigger _β_ . These results suggest that the “older” the institutions, the smaller their effect on contemporary outcomes ( _β_ increases with _r_ ), however legacies are still very important –democracy has intergenerational impacts ( _β_ is bigger for a longer time span). These results also provide a sense about the direction of the bias due to non-observable covariates: _β_ is likely to be biased upwards. It is likely that the region’s democratic institutions are failing as a commitment device that prevents ruling minorities from erecting barriers to the excluded, likely due to the effects of long-lasting legacies; e.g., high initial inequality. (I test for the robustness of all these specifications in section 5.2.) Table 1: Estimates of the pseudo-panel model, income inequality

|**A. Assuming**<br>_Dc,p_= <sup>1</sup><br>3 <sup>∑</sup><sup>_t∈_</sup><br>Equation:_Yc,g,p,ewc,g,p,e_=|<sup>_c_</sup><br>�<br>∑<sup>_t_+20</sup><br>_s_=_t−_30<sup>(1</sup><br> [_α_+_β_<br>_Dc,p_+|<sup>_−r_)</sup><sup>_t−sDp,s_</sup><br>�<br>_δ_<br>_D_<sup>2</sup><br>_c,p_ <sup>+</sup><sup>_ηg_</sup> <sup>+</sup><sup>_φp_</sup>|<sup>+</sup><sup>_φe_</sup> <sup>+</sup><sup>_ψp,e_</sup> <sup>+</sup><br>_ε_|_c,g,p,e_]_wc,g,p,e_|||||
|---|---|---|---|---|---|---|---|---|
||||**Dependent var**|**iable: Income**|**inequality (Gin**|**i, 0-100 scale)**|||
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|
|**Stock of democracy**|||||||||
|From 30 years before<br>birth to 20years after it|0.0022<br>(0.005)|-0.0367***<br>(0.009)|0.0025<br>(0.008)|-0.0425***<br>(0.012)|-0.0045<br>(0.012)|-0.0495***<br>(0.014)|-0.0205<br>(0.017)|-0.0591***<br>(0.016)|
|Squared value|-0.0002***<br>(0.000)|-0.0000<br>(0.000)|-0.0003***<br>(0.000)|-0.0001**<br>(0.000)|-0.0005***<br>(0.000)|-0.0004***<br>(0.000)|-0.0008**<br>(0.000)|-0.0010***<br>(0.000)|
|Constant|50.9524***<br>(0.844)|41.3353***<br>(1.665)|50.8682***<br>(0.892)|46.2987***<br>(1.615)|50.8253***<br>(0.933)|47.0358***<br>(1.540)|50.9335***<br>(0.952)|43.5713***<br>(1.522)|
|**Full set of fxed effects**|No|Yes|No|Yes|No|Yes|No|Yes|
|**_R2_**|0.178|0.684|0.163|0.676|0.146|0.671|0.141|0.670|
|**_Clusters_**|126|126|126|126|126|126|126|126|
|**Observations**|1850|1850|1850|1850|1850|1850|1850|1850|
|**B. Assuming**<br>_Dc,p_= <sup>1</sup><br>3 <sup>∑</sup><sup>_t∈_</sup><br>Equation:_Yc,g,p,ewc,g,p,e_=|<sup>_c_(∑</sup><sup>_t_+20</sup><br>_s_=_t_ <sup>(1</sup><sup>_−r_</sup><br> [_α_+_β_<br>_Dc,p_+|<sup>)</sup><sup>_t−sDp,s_)</sup><br>_δ_<br>_D_<sup>2</sup><br>_c,p_ <sup>+</sup><sup>_ηg_</sup> <sup>+</sup><sup>_φp_</sup>|<sup>+</sup><sup>_φe_</sup> <sup>+</sup><sup>_ψp,e_</sup> <sup>+</sup><br>_ε_|_c,g,p,e_]_wc,g,p,e_|||||
||||**Dependent va**|**riable: Income**|**inequality (Gi**|**ni, 0-100 scale)**|||
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|
|**Stock of democracy**|||||||||
|From the year of birth to|-0.0069|-0.0221*|-0.0103|-0.0288**|-0.0170|-0.0393***|-0.0281*|-0.0526***|
|20years after it|(0.009)|(0.011)|(0.011)|(0.012)|(0.013)|(0.014)|(0.017)|(0.015)|
|Squared value|-0.0002**<br>(0.000)|-0.0002***<br>(0.000)|-0.0003**<br>(0.000)|-0.0003***<br>(0.000)|-0.0004**<br>(0.000)|-0.0006***<br>(0.000)|-0.0008*<br>(0.000)|-0.0011***<br>(0.000)|
|Constant|50.5659***<br>(1.002)|48.0631***<br>(1.437)|50.6058***<br>(0.995)|47.9851***<br>(1.462)|50.7030***<br>(0.989)|47.9669***<br>(1.483)|50.8865***<br>(0.991)|43.9699***<br>(1.588)|
|**Full set of fxed effects**|No|Yes|No|Yes|No|Yes|No|Yes|
|**_R2_**|0.112|0.625|0.117|0.633|0.124|0.644|0.134|0.655|
|**_Clusters_**|126|126|126|126|126|126|126|126|
|**Observations**|1850|1850|1850|1850|1850|1850|1850|1850|

_Note_ : Robust standard errors clustered by country and birth-cohort in parentheses. * Significant at ten percent; ** significant at five percent; *** significant at one percent. Specifications (1), (3), (5) and (7) do not include fixed effects. Specifications (2), (4), (6) and (8) include the following fixed effects: gender ( _η_ ), country ( _φ_ ), survey ( _φ_ ), and an interaction between survey and country fixed effects ( _ψ_ ). Source: Author’s calculations based on data from Latin American household surveys, 1995-2009, biannual and Polity IV Project.

Now I focus on columns (2), (4), (6) and (8). Within the parameters of these specifications, a 13