Citation

Discussion Paper Details

Please find the details for DP4187 in an easy to copy and paste format below:

Full Details

Title: Inequality, Democracy and the Emergence of Institutions

Author(s): Mark Gradstein

Publication Date: January 2004

Keyword(s): democracy, inequality and property rights

Programme Area(s): Institutions and Economic Performance, International Macroeconomics, Public Economics and Transition Economics

Abstract: This Paper considers the emergence of institutions as a political outcome, arguing that the support for protection of private property rights is stronger the higher is the economy's aggregate income and the more equal its distribution. When these conditions initially hold, the politically influential rich elite may prefer to relinquish its power through democratization in order to commit future policy-makers to the enforcement of private property rights, thus ensuring larger investment and growth. In a very unequal economy, however, this growth-enhancing democratization will not take place. These conclusions are shown to be consistent with the existing historical and cross-country evidence.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4187

Bibliographic Reference

Gradstein, M. 2004. 'Inequality, Democracy and the Emergence of Institutions'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4187