Inequality and Institutions

Chong, Alberto; Gradstein, Mark

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Inequality and Institutions

36 Pages Posted: 31 Jan 2005

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

There are 3 versions of this paper

Date Written: November 2004

Abstract

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

Chong, Alberto and Gradstein, Mark, Inequality and Institutions (November 2004). Available at SSRN: https://ssrn.com/abstract=654482