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Inequality and Institutions

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Author Info
Alberto Chong (Research Department, Inter-American Development Bank)
Mark Gradstein (Department of Economics, Ben Gurion University, CEPR, CESifo, IZA)

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Abstract

This paper presents theory and evidence on the relationship between inequality and institutional quality. We exhibit a model in which the two may dynamically reinforce each other and set to test this relationship with a broad array of institutional measures. The double causality between institutional strength and a more equal distribution of income is empirically established using dynamic panel and linear feedback analysis. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/rest.89.3.454
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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 89 (2007)
Issue (Month): 3 (04)
Pages: 454-465
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Handle: RePEc:tpr:restat:v:89:y:2007:i:3:p:454-465

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Calderon, Cesar & Liu, Lin, 2003. "The direction of causality between financial development and economic growth," Journal of Development Economics, Elsevier, vol. 72(1), pages 321-334, October. [Downloadable!] (restricted)
    Other versions:
  2. Glaeser, Edward & Scheinkman, Jose & Shleifer, Andrei, 2003. "The injustice of inequality," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 199-222, January. [Downloadable!] (restricted)
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  3. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Chong, Alberto & Calderon, Cesar, 2000. "Institutional Quality and Income Distribution," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 761-86, July.
  5. Daniel Kaufmann & Massimo Mastruzzi & Diego Zavaleta, 2003. "Sustained Macroeconomic Reforms, Tepid Growth: A Governance Puzzle in Bolivia?," Development and Comp Systems 0308003, EconWPA. [Downloadable!]
  6. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300. [Downloadable!] (restricted)
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  8. Gradstein, Mark, 2004. "Inequality, Democracy and the Emergence of Institutions," CEPR Discussion Papers 4187, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Karla Hoff & Joseph E. Stiglitz, 2002. "After the Big Bang? Obstacles to the emergence of the rule of law in post-communist societies," Discussion Papers 0203-03, Columbia University, Department of Economics. [Downloadable!]
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  10. Levine, Ross & Loayza, Norman & Beck, Thorsten, 2000. "Financial intermediation and growth: Causality and causes," Journal of Monetary Economics, Elsevier, vol. 46(1), pages 31-77, August. [Downloadable!] (restricted)
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  11. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
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  12. Sonin, Konstantin, 2003. "Why the rich may favor poor protection of property rights," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 715-731, December. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alberto Chong & José Galdo & Jaime Saavedra-Chanduví, 2007. "Informalidad y Productividad en el Mercado Laboral: Perú 1986-2001 (Informality and Productivity in the Labor Market: Peru 1986 - 2001)," RES Working Papers 4527, Inter-American Development Bank, Research Department. [Downloadable!]
  2. Diego Winkelried, 2005. "Income Distribution and the Size of the Informal Sector," Development and Comp Systems 0512005, EconWPA. [Downloadable!]
  3. Gradstein, M., 2007. "Institutional Traps and Economic Growth," Cambridge Working Papers in Economics 0769, Faculty of Economics, University of Cambridge. [Downloadable!]
  4. Martín Guzmán & Ezequiel Molina, 2006. "Desigualdad e Instituciones en una Dimensión Intertemporal," Working Papers 0042, CEDLAS, Universidad Nacional de La Plata. [Downloadable!]
  5. Chong, Alberto & Gradstein, Mark, 2006. "Inequality and Informality," CEPR Discussion Papers 5545, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Lopez, Ramon & Galinato, Gregmar I. & Islam, Asif, 2009. "Pollution and the State: The Role of the Structure of Government," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48055, Australian Agricultural and Resource Economics Society. [Downloadable!]
  7. Resnick, Danielle & Birner, Regina, 2005. "Does Good Governance Contribute to Pro-poor Growth?: A Conceptual Framework and Empirical Evidence from Cross-Country Studies," Proceedings of the German Development Economics Conference, Kiel 2005 5, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  8. Alberto Chong & José Galdo & Jaime Saavedra-Chanduví, 2007. "Informality and Productivity in the Labor Market: Peru 1986 - 2001," RES Working Papers 4526, Inter-American Development Bank, Research Department. [Downloadable!]
  9. Mamoon, Dawood, 2007. "Relative Factor Return Gaps in Labour Markets and Global Integration," MPRA Paper 3045, University Library of Munich, Germany. [Downloadable!]
  10. Josef Falkinger & Volker Grossmann, 2005. "Distribution of Natural Resources, Entrepreneurship, and Economic Development: Growth Dynamics with two Elites," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  11. Alberto Chong & Mark Gradstein, 2007. "Desigualdad, Democracia, Calidad Institucional y Redistribucion Fiscal," RES Working Papers 4548, Inter-American Development Bank, Research Department. [Downloadable!]
  12. Resnick, Danielle & Birner, Regina, 2006. "Does good governance contribute to pro-poor growth?: a review of the evidence from cross-country studies," DSGD discussion papers 30, International Food Policy Research Institute (IFPRI). [Downloadable!]
  13. Mark Gradstein & Era Dabla-Norris, 2004. "The Distributional Bias of Public Education: Causes and Consequences," IMF Working Papers 04/214, International Monetary Fund. [Downloadable!]
  14. Stephan Klasen & Melanie Grosse & Rainer Thiele & Jann Lay & Julius Spatz & Manfred Wiebelt, 2004. "Operationalizing Pro-Poor Growth - Country Case Study: Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 101, Ibero-America Institute for Economic Research. [Downloadable!]
  15. Dawood Mamoon, 2007. "Good institutions and fair trade: a road map to local and global social harmony," Working Papers - General Series 450, Institute of Social Studies. [Downloadable!]
  16. Robert J. Gordon & Ian Dew-Becker, 2008. "Controversies about the Rise of American Inequality: A Survey," NBER Working Papers 13982, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Alberto Chong & Mark Gradstein, 2007. "Inequality, Democracy, Institutional Quality, and Fiscal Redistribution," RES Working Papers 4547, Inter-American Development Bank, Research Department. [Downloadable!]
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