Inequality in Developing Economies: The Role of Institutional Development

Adalgiso Amendola, Joshy Easaw () and Antonio Savoia
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Joshy Easaw: Department of Economics, University of Bath

No 116, CELPE Discussion Papers from CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy

Abstract: This paper studies the distributive impact of institutional change in developing countries. In such economies, economic institutions, such as property rights systems, may act to preserve the interests of an influential minority, but this depends crucially on the level of political equality. For example, dominant classes 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 the protection of property rights increases income inequality; (b) such an effect is larger in low-democracy environments; (c) a minority of countries have developed a set political institutions capable of counterbalancing this effect.

Keywords: inequality; developing economies; institutions; property rights; democracy (search for similar items in EconPapers)
JEL-codes: D70 O15 O17 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2010
New Economics Papers: this item is included in nep-dev, nep-pke, nep-pol and nep-sea
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Related works:
Journal Article: Inequality in developing economies: the role of institutional development (2013)
Working Paper: Inequality in Developing Economies: The Role of Institutional Development (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:sal:celpdp:0116

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