The Injustice of Inequality

Edward Ludwig Glaeser () and Andrei Shleifer

No 9150, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In many countries, the operation of legal, political and regulatory institutions is subverted by the wealthy and the politically powerful for their own benefit. This subversion takes the form of corruption, intimidation, and other forms of influence. We present a model of such institutional subversion focusing specifically on courts and of the effects of inequality in economic and political resources on the magnitude of subversion. We then use the model to analyze the consequences of institutional subversion for the law and order environment in the country, as well as for capital accumulation and growth. We illustrate the model with historical evidence from Gilded Age United States and the transition economies of the 1990s. We also present some cross-country evidence consistent with the basic prediction of the model.

JEL-codes: L1 L4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-law and nep-pke
Date: 2002-09
Note: EFG LE
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Related works:
Working Paper: The Injustice of Inequality (2002)
Journal Article: The injustice of inequality (2003)
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