 Inequality and stabilityBoyan Jovanovic (), Antonio Barbosa () and Mark Spiegel No 96-08, Working Papers in Applied Economic Theory from Federal Reserve Bank of San Francisco Abstract: This paper analyzes how political stability depends on economic factors. Fluctuations in groups' economic capacities and in their abilities to engage in rent-seeking or predatory behavior create periodic incentives for those groups to renege on their social obligations. A constitution remains in force so long as no party wishes to defect to the noncooperative situation, and it is reinstituted as soon as each party finds it to its advantage to revert to cooperation. Partnerships of equals are easier to sustain than are arrangements in which one party is more powerful in some economic or noneconomic trait. In this sense, inequality is bad for social welfare. Surprisingly, perhaps, it is the rich, and not the poor segments of society who in our model pose the threat to the stability of the social order. Using cross-country data, we test and confirm the prediction that most constitutional disruptions should be accompanied by increases in income inequality. Keywords: Income distribution; Political science (search for similar items in EconPapers) Published in Annales d'Economie et de Statistique (Oct.-Dec. 1997, no. 48, pp. 15-40) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfap:96-08 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Working Papers in Applied Economic Theory from Federal Reserve Bank of San Francisco Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.