Abstract
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.
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In the present paper we outline the main issues, provide and discuss the key empirical results. An extensive discussion of the issues raised in this paper (which also includes a survey of the recent theoretical and empirical literature), together with the complete empirical results are found in Amendola et al. (2011), this is the discussion paper version of this article: http://ideas.repec.org/p/exe/wpaper/1107.html.
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Amendola, A., Easaw, J. & Savoia, A. Inequality in developing economies: the role of institutional development. Public Choice 155, 43–60 (2013). https://doi.org/10.1007/s11127-011-9838-3
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DOI: https://doi.org/10.1007/s11127-011-9838-3