DP4739 Inequality and Institutions
|Author(s):||Alberto Chong, Mark Gradstein|
|Publication Date:||November 2004|
|Keyword(s):||causality, governance, inequality, institutions|
|JEL(s):||D70, O15, O17|
|Programme Areas:||Public Economics, Institutions and Economic Performance|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=4739|
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.