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Land Inequality and the Origin of Divergence and Overtaking in the Growth Process

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Author Info

  • Oded Galor

    (Brown University & Hebrew University)

  • Omer Moav

    (Hebrew University)

  • Dietrich Vollrath

    (Brown University)

Abstract

This research develops a unified growth theory that captures the transition from the domination of geographical factors\ in the determination of productivity in early stages of development to the domination of institutional factors in mature stages of development. It identifies a novel channel through which favorable geographical conditions that were inherently associated with inequality adversely affected the emergence of institutions that promote human capital accumulation. The research suggests that the distribution of land ownership within and across countries affected the nature of the transition from an agrarian to an industrial economy generating diverging growth patterns across countries. Furthermore, the qualitative change in the role of land in the process of industrialization brought about changes in the ranking of countries in the world income distribution. The basic premise of this research, regarding the negative effect of land inequality on public expenditure on education is established empirically based on cross-state data from the High School Movement in the first half of the 20th century in the US.

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Bibliographic Info

Paper provided by EconWPA in its series GE, Growth, Math methods with number 0410004.

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Length: 44 pages
Date of creation: 05 Oct 2004
Date of revision:
Handle: RePEc:wpa:wuwpge:0410004

Note: Type of Document - pdf; pages: 44
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Web page: http://128.118.178.162

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Keywords: Land Inequality; Institutions; Geography; Human capital accumulation; Growth;

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Cited by:
  1. Aizenman, Joshua & Lee, Minsoo & Park, Donghyun, 2012. "The Relationship between Structural Change and Inequality: A Conceptual Overview with Special Reference to Developing Asia," ADBI Working Papers 396, Asian Development Bank Institute.
  2. Andrea Asoni, 2008. "Protection Of Property Rights And Growth As Political Equilibria," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 953-987, December.
  3. Irina Rosa España Eljaiek & Fabio Sánchez Torres, 2010. "Industrialización regional, café y capital humano en la primera mitad del siglo XX en Colombia," DOCUMENTOS CEDE 007723, UNIVERSIDAD DE LOS ANDES-CEDE.
  4. Rafael Di Tella & Robert MacCulloch, 2009. "Why Doesn't Capitalism Flow to Poor Countries?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 40(1 (Spring), pages 285-332.
  5. Arthur MacEwan, 2007. "The Meaning of Poverty: Questions of Distribution and Power," Working Papers wp148, Political Economy Research Institute, University of Massachusetts at Amherst.
  6. L. Marattin, 2007. "Optimal Fiscal Policy with Private and Public Investment in Education," Working Papers 589, Dipartimento Scienze Economiche, Universita' di Bologna.
  7. Glaeser, Edward L., 2005. "Inequality," Working Paper Series rwp05-056, Harvard University, John F. Kennedy School of Government.
  8. Guy Michaels, 2006. "The Long-Term Consequences of Regional Specialization," CEP Discussion Papers dp0766, Centre for Economic Performance, LSE.
  9. Dietrich Vollrath & Lennart Erickson, 2007. "Land Distribution and Financial System Development," IMF Working Papers 07/83, International Monetary Fund.

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