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Income Inequality, Poverty, and the Rule of Law: Latin America vs the Rest of the World1

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  • Sonora, Robert

Abstract

This paper investigates the relationship between the rule of law and income inequality and poverty in twenty Latin American countries using an unbalanced panel over the period 1995 - 2014. These results are then compared to estimates for non-Latin American counties. Using feasible GLS panel methods, we finnd that in many cases, improvements to legal systems reduce inequality and poverty in Latin America while having the opposite effect in the rest of the world. Results are robust to different definitions of inequality and rule of law. Protection of property rights is the most significant rule of law indicator for Latin America economies.

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  • Sonora, Robert, 2019. "Income Inequality, Poverty, and the Rule of Law: Latin America vs the Rest of the World1," MPRA Paper 91512, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:91512
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    File URL: https://mpra.ub.uni-muenchen.de/91512/1/MPRA_paper_91512.pdf
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    Cited by:

    1. Mark Edem Kunawotor & Godfred Alufar Bokpin & Charles Barnor, 2020. "Drivers of income inequality in Africa: Does institutional quality matter?," African Development Review, African Development Bank, vol. 32(4), pages 718-729, December.

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    More about this item

    Keywords

    Income Inequality; Poverty Growth; Rule of law; Panel data; Institutions;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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