Inequality in developing economies: the role of institutional development.

Amendola, Adalgiso; Easaw, Joshy; Savoia, Antonio

This paper studies the distributive impact of institutional change in developing countries. In such economies, property rights systems may preserve the interests of an influential minority, who can control key-markets, access to assets and investment opportunities, especially if they enjoy disproportionate political power. We test this hypothesis using cross-section and panel data methods on a sample of low- and middle-income economies from Africa, Asia and Latin America. Results suggest that: (a) increasing property rights protection increases income inequality; (b) this effect is larger in low-democracy environments; (c) some countries have developed political institutions capable of counterbalancing this effect.

EQUALITY research; SOCIAL change; DEMOCRACY; SOCIOECONOMIC factors; POWER (Social sciences); SOCIAL conditions of developing countries; DEVELOPING countries

Public Choice, 2013, Vol 155, Issue 1/2, p43

0048-5829

Academic Journal

10.1007/s11127-011-9838-3