TY - JOUR
T1 - Political and Economic Inequities and the Shaping of Institutions and Redistribution
AU - Chong, Alberto
AU - Gradstein, Mark
PY - 2017/4/1
Y1 - 2017/4/1
N2 - 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.
AB - 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.
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U2 - 10.1002/soej.12206
DO - 10.1002/soej.12206
M3 - Article in a journal
SN - 0038-4038
VL - 83
SP - 952
EP - 971
JO - Southern Economic Journal
JF - Southern Economic Journal
IS - 4
ER -