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The distributive effects of institutional quality when government stability is endogenous

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  • Carmignani, Fabrizio

Abstract

Redistribution is the strategic response of the incumbent to a decrease in its survival probability resulting from weak institutions and growing income inequalities. The purpose of the paper is to test empirically the validity of this conjecture. System and single equation estimations provide a consistent picture: (i) bad institutions increase income inequality, while more redistribution reduces income inequality; (ii) greater inequality increases the probability of government termination; and (iii) a higher probability of termination increases the extent of redistribution. Overall, there is strong evidence in support of the proposed conjecture.

Suggested Citation

  • Carmignani, Fabrizio, 2009. "The distributive effects of institutional quality when government stability is endogenous," European Journal of Political Economy, Elsevier, vol. 25(4), pages 409-421, December.
  • Handle: RePEc:eee:poleco:v:25:y:2009:i:4:p:409-421
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    2. Thaize Challier, M.-Christine, 2010. "Socio-political conflict, social distance, and rent extraction in historical perspective," European Journal of Political Economy, Elsevier, vol. 26(1), pages 51-67, March.
    3. Leonid Polishchuk & Georgiy Syunyaev, 2015. "Ruling elites’ rotation and asset ownership: implications for property rights," Public Choice, Springer, pages 159-182.
    4. d'Agostino, Giorgio & Scarlato, Margherita, 2012. "Inclusive Institutions, Innovation and Economic Growth: Estimates for European Countries," MPRA Paper 43098, University Library of Munich, Germany.
    5. Desire Avom & Fabrizio Carmignani & Abdour Chowdhury, "undated". "Four Scenarios of Poverty Reduction and the Role of Economic Policy," MRG Discussion Paper Series 3109, School of Economics, University of Queensland, Australia.
    6. Adnan Efendic & Naida Trkic-Izmirlija, 2013. "Effects of the global economic crisis and public spending on income distribution in Bosnia and Herzegovina," wiiw Balkan Observatory Working Papers 108, The Vienna Institute for International Economic Studies, wiiw.
    7. Rüth, Sebastian & Bachmann, Rüdiger, 2016. "Systematic Monetary Policy and the Macroeconomic Effects of Shifts in Loan-to-Value Ratios," Annual Conference 2016 (Augsburg): Demographic Change 145826, Verein für Socialpolitik / German Economic Association.
    8. Bjorvatn, Kjetil & Naghavi, Alireza, 2011. "Rent seeking and regime stability in rentier states," European Journal of Political Economy, Elsevier, pages 740-748.
    9. Carmignani, Fabrizio, 2013. "Development outcomes, resource abundance, and the transmission through inequality," Resource and Energy Economics, Elsevier, pages 412-428.
    10. Carmignani, Fabrizio & Avom, Desire, 2010. "The social development effects of primary commodity export dependence," Ecological Economics, Elsevier, vol. 70(2), pages 317-330, December.
    11. Carmignani, Fabrizio, 2013. "Development outcomes, resource abundance, and the transmission through inequality," Resource and Energy Economics, Elsevier, pages 412-428.
    12. Desire Avom & Fabrizio Carmignani, "undated". "Is Mother Nature a Curse for Social Development?," MRG Discussion Paper Series 2709, School of Economics, University of Queensland, Australia.

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