The distributive effects of institutional quality when government stability is endogenous
Author(s)
Carmignani, Fabrizio
Griffith University Author(s)
Year published
2009
Metadata
Show full item recordAbstract
Redistribution is the strategic response of the incumbent to a decrease in its survival probability resulting from weak institutions and growing income inequalities. The purpose of the paper is to test empirically the validity of this conjecture. System and single equation estimations provide a consistent picture: (i) bad institutions increase income inequality, while more redistribution reduces income inequality; (ii) greater inequality increases the probability of government termination; and (iii) a higher probability of termination increases the extent of redistribution. Overall, there is strong evidence in support of the ...
View more >Redistribution is the strategic response of the incumbent to a decrease in its survival probability resulting from weak institutions and growing income inequalities. The purpose of the paper is to test empirically the validity of this conjecture. System and single equation estimations provide a consistent picture: (i) bad institutions increase income inequality, while more redistribution reduces income inequality; (ii) greater inequality increases the probability of government termination; and (iii) a higher probability of termination increases the extent of redistribution. Overall, there is strong evidence in support of the proposed conjecture.
View less >
View more >Redistribution is the strategic response of the incumbent to a decrease in its survival probability resulting from weak institutions and growing income inequalities. The purpose of the paper is to test empirically the validity of this conjecture. System and single equation estimations provide a consistent picture: (i) bad institutions increase income inequality, while more redistribution reduces income inequality; (ii) greater inequality increases the probability of government termination; and (iii) a higher probability of termination increases the extent of redistribution. Overall, there is strong evidence in support of the proposed conjecture.
View less >
Journal Title
European Journal of Political Economy
Volume
25
Issue
4
Subject
Economic theory
Applied economics
Macroeconomics (incl. monetary and fiscal theory)
Public economics - public choice
Panel data analysis
Political science
Development studies