IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v63y2022icp35-39.html
   My bibliography  Save this article

Institutional Kuznets curve? An empirical analysis with panel data

Author

Listed:
  • Martínez-Navarro, Diego
  • Amate-Fortes, Ignacio
  • Guarnido-Rueda, Almudena
  • Oliver-Márquez, Francisco J.

Abstract

The hypothesis that institutions directly influence income distribution has been defended by numerous authors. However, it may be observed that institutions are deteriorating in developed economies, which poses the question: could a phenomenon similar to the Kuznets curve be applied? Using the Worldwide Governance Indicators' index of the quality of institutions from the World Bank, and data on per capita GDP from the Maddison project (using a sample of 156 countries in the period of 1996–2015), there appears to be empirical evidence in favour of the existence of an institutional Kuznets curve, using the Prais-Winsten estimation and the Generalised Method of Moments (GMM).

Suggested Citation

  • Martínez-Navarro, Diego & Amate-Fortes, Ignacio & Guarnido-Rueda, Almudena & Oliver-Márquez, Francisco J., 2022. "Institutional Kuznets curve? An empirical analysis with panel data," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 35-39.
    • Handle: RePEc:eee:streco:v:63:y:2022:i:c:p:35-39
    DOI: 10.1016/j.strueco.2022.08.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X22001230
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2022.08.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Antonakakis, Nikolaos & Collins, Alan, 2018. "A suicidal Kuznets curve?," Economics Letters, Elsevier, vol. 166(C), pages 90-93.
    2. Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October.
    3. Inglehart, Ronald & Flanagan, Scott C., 1987. "Value Change in Industrial Societies," American Political Science Review, Cambridge University Press, vol. 81(4), pages 1289-1319, December.
    4. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    5. Agustin Molina-Morales & Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2013. "Social Expenditure in the European Union: Does Inequality Matter?," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(3), pages 745-764.
    6. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    7. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    8. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    9. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
    10. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
    11. Fields, Gary S, 1989. "Changes in Poverty and Inequality in Developing Countries," The World Bank Research Observer, World Bank, vol. 4(2), pages 167-185, July.
    12. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    13. Muhammad Ali Nasir & Toan Luu Duc Huynh & Quynh Thi Nhu Do & Cuc Thi Nguyen & Quynh Thi Tran, 2020. "Implications of Government Borrowing for Corporate Financing in Emerging Economies: A Crowding Out Kuznets Curve," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 1-27, June.
    14. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92, National Bureau of Economic Research, Inc.
    15. Shahbaz, Muhammad & Nasir, Muhammad Ali & Hille, Erik & Mahalik, Mantu Kumar, 2020. "UK's net-zero carbon emissions target: Investigating the potential role of economic growth, financial development, and R&D expenditures based on historical data (1870–2017)," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    16. Diego Martínez-Navarro & Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2020. "Inequality and development: is the Kuznets curve in effect today?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 703-735, October.
    17. Takuma Kunieda & Masashi Takahashi, 2022. "Inequality and institutional quality in a growth model," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 189-213, April.
    18. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    19. Hiroaki Sasaki, 2022. "Special feature: economic dynamics—growth, capital, labor, technology, and money," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 159-167, April.
    20. Shahbaz, Muhammad & Nasir, Muhammad Ali & Roubaud, David, 2018. "Environmental degradation in France: The effects of FDI, financial development, and energy innovations," Energy Economics, Elsevier, vol. 74(C), pages 843-857.
    21. Daron Acemoglu & Francisco A. Gallego & James A. Robinson, 2014. "Institutions, Human Capital, and Development ," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 875-912, August.
    22. Banerjee, Abhijit V & Duflo, Esther, 2003. "Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-299, September.
    23. Yixiao Zhou, 2018. "Human capital, institutional quality and industrial upgrading: global insights from industrial data," Economic Change and Restructuring, Springer, vol. 51(1), pages 1-27, February.
    24. Daron Acemoğlu & James A. Robinson, 2016. "Paths to Inclusive Political Institutions," Studies in Economic History, in: Jari Eloranta & Eric Golson & Andrei Markevich & Nikolaus Wolf (ed.), Economic History of Warfare and State Formation, pages 3-50, Springer.
    25. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nobuhiro Mizuno & Katsuyuki Naito & Ryosuke Okazawa, 2017. "Inequality, extractive institutions, and growth in nondemocratic regimes," Public Choice, Springer, vol. 170(1), pages 115-142, January.
    2. Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
    3. Alessandra Bonfiglioli, 2004. "Equities and Inequality," 2004 Meeting Papers 256, Society for Economic Dynamics.
    4. Casey, Gregory & Klemp, Marc, 2021. "Historical instruments and contemporary endogenous regressors," Journal of Development Economics, Elsevier, vol. 149(C).
    5. Diego Martínez-Navarro & Ignacio Amate-Fortes & Almudena Guarnido-Rueda, 2020. "Inequality and development: is the Kuznets curve in effect today?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 703-735, October.
    6. Ann-Sofie Isaksson, 2011. "Social divisions and institutions: assessing institutional parameter variation," Public Choice, Springer, vol. 147(3), pages 331-357, June.
    7. Matthew J. Baker & Christa N. Brunnschweiler & Erwin H. Bulte, 2008. "Did History Breed Inequality? Colonial Factor Endowments and Modern Income Distribution," CER-ETH Economics working paper series 08/86, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    8. Sivropoulos-Valero, Anna Alexandra, 2021. "Education and economic growth," LSE Research Online Documents on Economics 114434, London School of Economics and Political Science, LSE Library.
    9. Anna Valero, 2021. "Education and economic growth," POID Working Papers 006, Centre for Economic Performance, LSE.
    10. Fuchs-Schündeln, N. & Hassan, T.A., 2016. "Natural Experiments in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 923-1012, Elsevier.
    11. Dustin Chambers, 2005. "Inequality and Growth: A Semiparametric Investigation," Computing in Economics and Finance 2005 132, Society for Computational Economics.
    12. Summerhill, William, 2010. "Colonial Institutions, Slavery, Inequality, and Development: Evidence from São Paulo, Brazil," MPRA Paper 22162, University Library of Munich, Germany.
    13. Anna Valero, 2021. "Education and economic growth," CEP Discussion Papers dp1764, Centre for Economic Performance, LSE.
    14. Gutiérrez-Romero, Roxana, 2021. "How does inequality affect long-run growth? Cross-industry, cross-country evidence," Economic Modelling, Elsevier, vol. 95(C), pages 274-297.
    15. Canning, David & Mabeu, Marie Christelle & Pongou, Roland, 2020. "Colonial origins and fertility: can the market overcome history?," MPRA Paper 112496, University Library of Munich, Germany.
    16. Andres Irarrazaval, 2023. "The Pillars of Shared Prosperity: Insights From Elite versus State Extraction And From a New Instrument," Working Papers wp549, University of Chile, Department of Economics.
    17. Grossmann, Volker, 2008. "Risky human capital investment, income distribution, and macroeconomic dynamics," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 19-42, March.
    18. Scott Gehlbach & Konstantin Sonin & Ekaterina Zhuravskaya, 2010. "Businessman Candidates," American Journal of Political Science, John Wiley & Sons, vol. 54(3), pages 718-736, July.
    19. Knack, Steve & Xu, Lixin Colin, 2017. "Unbundling institutions for external finance: Worldwide firm-level evidence," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 215-232.
    20. Alvaro Aguirre, 2017. "Contracting Institutions and Economic Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 192-217, March.

    More about this item

    Keywords

    Kuznets curve; Institutions; Development; Governance;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:63:y:2022:i:c:p:35-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.