Economic inequality is the contrasts between the economic conditions of different persons or various groups (2). Kelly argued that inequality is social differentiation accompanied by differential moral evaluation. According to him, it is clear that inequality is present when socially differentiated groups are subject to cultural evaluations of moral worthiness (473).
Inequality helps us understand the need and relevance of democracy and thus to understand democratization. Many researchers have questioned whether more democracy is a cause of more equality or more equality is a cause of more democracy. Evidences and theories show that inequality has negative influences on a democracy and thus inequality helps us understand the need for democratization.
Democracy can remain powerful only when there is social stability and people are free from intense conflict. Inequality has always been a key to social anarchy and social conflicts. According to Muller, income inequality has negative impacts on a country’s level of democracy and it is grounded in the theoretical preposition that extreme inequality generates intense and irreconcilable conflicts that are in turn incompatible with stable democracy (990). Muller concluded with his empirical findings that higher levels of inequality were a reason to decline the levels of democracy during the period of 1965 to 1980 (991).
Midlarsky argued that in the cross national literatures, economic equality, democratization and economic development are positively related. According to him, the evidences have proved that political participation and democratization are greater at higher levels of economic development (110). As long as there is high level of equality in a community, the political involvement and democratization will gradually grow and then to achieve economic development as well. If there is higher level of inequality, in contrast, the economic development will be comparatively lower.