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Inequality, Property Rights, and Economic Growth in Transition Economies: Theory and Russian Evidence

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  • Sonin Konstantin

Abstract

For economies in transition, the issues of property rights protection provided by the state and implications for economic performance are very important. The paper develops an endogenous growth model with incomplete capital markets and the level of public protection of property rights determined by voting (possibly different from the majority voting) and verifies the implications using cross-section data on Russian regions. During transition (since 1992), Russian regions demonstrated enormous differences in growth rates. It is found that these differences may be explained by initial conditions and effectiveness of institutions. Also, positive impact of inequality on the level of public protection of property rights is found and a theoretical explanation for this phenomenon in the framework of the model is provided.

Suggested Citation

  • Sonin Konstantin, 2001. "Inequality, Property Rights, and Economic Growth in Transition Economies: Theory and Russian Evidence," EERC Working Paper Series 2k/02e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:2k/02e
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    References listed on IDEAS

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    1. Verdier, Thierry, 1994. "Models of political economy of growth: A short survey," European Economic Review, Elsevier, vol. 38(3-4), pages 757-763, April.
    2. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-739, September.
    3. Skaperdas, Stergios & Syropoulos, Constantinos, 1997. "The Distribution of Income in the Presence of Appropriative Activities," Economica, London School of Economics and Political Science, vol. 64(253), pages 101-117, February.
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    Cited by:

    1. Nadia Vanteeva, 2012. "The Re-Emerging Role of the State in Contemporary Russia," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(1), pages 23-34, September.
    2. Efendic, Adnan & Pugh, Geoff & Adnett, Nick, 2011. "Institutions and economic performance: A meta-regression analysis," European Journal of Political Economy, Elsevier, vol. 27(3), pages 586-599, September.

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