 Endogenous Property Rights, Conflict Intensity And Inequality In Asymmetric Rent-Seeking ContestHSE Working papers from National Research University Higher School of Economics Abstract: Does less inequality in wealth distribution imply better property rights protection? In this paper we show that this impact is non monotonous and is conditional on a) equilibrium type: conflict (rent-seeking) or peace, b) the reasons of changes in wealth distribution, and c) the size of the ruling class, “elite”. In the conflict stage, institutional quality positively depends on the wealth of the elite, but negatively – on the size of the elite class. However, the transition from conflict to peace stage (with no rent-seeking and fast growth) requires the reduction of inequality. This generates an institutional trap. Moreover, the intensity of rent-seeking behavior increases both with progressive redistribution of wealth and with widening of the ruling class. Our results allow characterizing wealth distributions, wherein it is better to redistribute wealth or to expand the ruling class in order to improve institutions and limit rent-seeking incentives Keywords: property rights institutions; inequality; rent-seeking; wealth distribution; institutional traps; conflict; economic development (search for similar items in EconPapers) Published in WP BRP Series: Economics / EC, November 2014, pages 1-39 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:72/ec/2014 Access Statistics for this paper More papers in HSE Working papers from National Research University Higher School of Economics |
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