ABSTRACT
Good governance can contribute towards the achievement of a range of desirable social outcomes including economic development, better health and education, environmental quality and happiness. Education could be the key that allows countries to escape the high-inequality-“wrong” culture-bad governance trap. The analysis of contemporary societies suggests that inequality may undermine good governance because of the behaviour of societal members at either end of the income distribution. The negative impact of economic inequality on governance persists when additionally accounting for the effect of culture, although the results suggest that the impact of the latter tends to be stronger. Higher economic inequalities will undermine good governance because of the behaviour of individuals or groups on either end of the income distribution. Poor governance will feed back into greater inequalities because corrupt governments are more likely to accommodate economic elites and because corruption will reduce popular support for social spending and taxation.
