Inequality and Institutions
36 Pages Posted: 31 Jan 2005
Date Written: November 2004
This Paper presents theory and evidence on the relationship between inequality and institutional quality. We exhibit a model in which the two dynamically reinforce each other and set to test this relationship with a broad array of institutional measures. We establish the double causality between institutional strength and a more equal distribution of income and show its robustness to different data sources that cover various time-spans and to changes in specification.
Keywords: Institutions, inequality, governance, causality
JEL Classification: D70, O15, O17
Suggested Citation: Suggested Citation