Rising inequality has been hypothesized to have a profound effect on global political and economic outcomes. While recent studies have emphasized the theoretical link between globalization, financial development and inequality, the nature of the empirical relationship is less well understood. This study exploits a panel dataset of 50 countries over a 25-year period (1990 - 2014) to explore the relationship between income inequality and key economic variables such as: i) trade integration, ii) financial development and iii) economic development. The paper distinguishes itself from prior studies on multiple fronts. It exploits a new broad-based measure of financial development in exploring the links between financial development and inequality instead of more ad-hoc approaches used in prior studies. In a similar vein, trade globalization is treated as a multidimensional phenomenon in its own right, borrowing concepts from network science. Unlike prior studies, the relationship between the political ideology of incumbent governments is also introduced as a possible determinant. Both static and dynamic analyses emphasize the role of sectoral structure of the economy and also support the impact of both growth and level effects of real GDP per capita on income inequality. The dynamic specification of the model emphasizes the persistent nature of inequality and highlights the role of unemployment in exacerbating the problem of income inequality, while arable land availability, a variable closely related to land distribution, has a countervailing effect. Financial development favouring market deepening rather than institutional deepening, high and persistent inflation, and the ideological orientation of incumbent political parties or coalitions were also found to be key determinants of inequality. Although not a robust finding, there is some evidence that lowering trade regulations and restrictions can ameliorate income inequality, while the “winner takes all”, network effects of trade has the opposite effect. Natural resource endowments also play a significant but relatively less robust role in affecting inequality outcomes.

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