Inequality persistence through vertical vs. horizontal coalitions
AbstractThis paper aims to contribute to a better understanding of the observed high persistence of cross-country differences in inequality. It focuses on the interactions between inequality and the predominance of either horizontal coalitions (among individuals of similar economic status) or vertical ones (among individuals with different economic status). A model is proposed showing that the interactions between inequality and the type of coalition formed in a society can give rise to self-sustained social contracts where inequality persists. Key mechanisms of the model are illustrated using the transformation in inequality, redistribution and social relations in Modern England, as well as the "paternalist" system of the US South at the beginning of the XXth century.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Development Economics.
Volume (Year): 90 (2009)
Issue (Month): 2 (November)
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Web page: http://www.elsevier.com/locate/devec
Inequality Redistribution Working-class Social contracts;
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