Inequality, Infrastructure, and Institutions – Empirical Studies in Public Economics and Political Economy

Florian Dorn prepared this study during his doctoral studies at the Ludwig-Maximilians-University of Munich (LMU). The study was completed in September 2020 and accepted as doctoral thesis by the Department of Economics. This dissertation contributes to the empirics of public economics and political economy. All chapters are self-contained research articles and can be read independently. However, the chapters are mutually related and contribute to the discussion on how economic inequality, institutions, and economic and infrastructure policies can influence welfare and political stability. Chapter 2 investigates how relative economic deprivation influences the support for radical parties. Chapter 3 examines how trade openness influences income inequality. Chapter 4 uses a case study to discuss how infrastructure policies may affect regional economic development. Chapters 5 and 6 contribute to the debate whether political and fiscal institutions influence budgeting, accountability, and government efficiency. All chapters of this dissertation thoroughly discuss empirical identification strategies, endogeneity concerns, and remaining caveats regarding causal inferences. The study employs state-of-the-art empirical techniques to infer causal effects including instrumental variables, difference-in-differences, event study and synthetic control estimations. The addendum includes extended abstracts of three further research projects during the Ph.D. phase of Florian Dorn: (I) Globalization, government ideology, and top income shares: Evidence from OECD countries; (II) Political institutions and health expenditure; (III) The common interest of health and the economy: Evidence from Covid-19 containment policies. These papers are also related to the empirics on public economics and political economy and well contribute to his overall research agenda.