The Injustice of Inequality

43 Pages Posted: 15 Sep 2002 Last revised: 6 Jul 2018

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

José Scheinkman

Columbia University; Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2002

Abstract

In many countries, the operation of legal, political and regulatory institutions is subverted by the wealthy and the politically powerful for their own benefit. This subversion takes the form of corruption, intimidation, and other forms of influence. We present a model of such institutional subversion focusing specifically on courts and of the effects of inequality in economic and political resources on the magnitude of subversion. We then use the model to analyze the consequences of institutional subversion for the law and order environment in the country, as well as for capital accumulation and growth. We illustrate the model with historical evidence from Gilded Age United States and the transition economies of the 1990s. We also present some cross-country evidence consistent with the basic prediction of the model.

Suggested Citation

Glaeser, Edward L. and Scheinkman, José and Shleifer, Andrei, The Injustice of Inequality (September 2002). NBER Working Paper No. w9150. Available at SSRN: https://ssrn.com/abstract=330984

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

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José Scheinkman

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Andrei Shleifer

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