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Inequality in Developing Economies: The Role of Institutional Development

Author

Listed:
  • Adalgiso Amendola

    (Università di Salerno)

  • Joshy Easaw

    (University of Swansea)

  • Antonio Savoia

    (Department of Economics, University of Exeter)

Abstract

This paper studies the distributive impact of institutional change in developing countries. In such economies, property rights systems may preserve the interests of an influential minority, who can control key-markets, access to assets and investment opportunities, especially if they enjoy disproportionate political power. We test this hypothesis using cross-section and panel data methods on a sample of low- and middle-income economies from Africa, Asia and Latin America. Results suggest that: (a) increasing property rights protection increases income inequality; (b) this effect is larger in low-democracy environments; (c) few countries have developed political institutions capable of counterbalancing this effect.

Suggested Citation

  • Adalgiso Amendola & Joshy Easaw & Antonio Savoia, 2011. "Inequality in Developing Economies: The Role of Institutional Development," Discussion Papers 1107, University of Exeter, Department of Economics.
    • Handle: RePEc:exe:wpaper:1107
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    References listed on IDEAS

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    More about this item

    Keywords

    Inequality; developing economies; institutions; property rights; democracy.;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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