Ètyøi mechanismy pøíjmové diferenciace / Four political economic mechanisms of income differentiation [available in Czech only]

Ludìk Rychetník ()
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Ludìk Rychetník: Centre for Euro-Asian Studies, Business School, The University of Reading, http://www.reading.ac.uk/business/bus-home.asp

No 2006/09, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper describes four mechanisms of income differentiation which generate inequalities both at national and international levels. They are: (i) Increasing returns to scale, (ii) cost of capital (interest) hidden in prices, (iii) economic rent derived from scarce natural resources, and (iv) exploitative state and private structures. Only the third and fourth mechanisms have been analyzed as they generate inequities, ie. inequalities which can be considered as unfair. It is argued that the effect of the third mechanism can be moderated by taxation paid from the rent. The fourth mechanism disrupts governance and economic activities in many developing countries and adversely affects the post communist states as well. International institutions as the World Bank pay increasing attention to it through their Governance and Anti-Corruption programmes. However a substantial improvement can be achieved by consistent effort of domestic forces in each country.

Keywords: System legitimacy; Inequality; Economic Rent; Governance and Anti-Corruption (search for similar items in EconPapers)
JEL-codes: A13 D63 H11 O17 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2006-03, Revised 2006-03
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