Political and Economic Inequities and the Shaping of Institutions and Redistribution

Alberto Chong, Mark Gradstein

Research output: Contribution to journalArticle in a journalpeer-review

5 Scopus citations

Abstract

The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The effect of the former is to increase productive investment, and the effect of the latter is to decrease it—with resulting ambiguous implications for economic growth. Testing these predictions empirically in a panel of countries, we find that inequality has a negative effect on both institutional quality and redistribution.
Original languageEnglish
Pages (from-to)952-971
Number of pages20
JournalSouthern Economic Journal
Volume83
Issue number4
DOIs
StatePublished - 1 Apr 2017

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