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The Middle Class Consensus and Economic Development

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  • Easterly, William

Abstract

A middle class consensus is defined as a high share of income for the middle class and a low degree of ethnic divisions. The paper links a middle class consensus to resource endowments, along the lines of the provocative thesis of Engerman and Sokoloff (1997 and 2000). This paper exploits this association using tropical resource endowments as instruments for inequality. A higher share of income for the middle class and lower ethnic divisions are associated with higher income and higher growth, as well as with more education, better health, better infrastructure, better economic policies, less political instability, less civil war and ethnic minorities at risk, more social "modernization" and more democracy. Copyright 2001 by Kluwer Academic Publishers

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  • Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    • Handle: RePEc:kap:jecgro:v:6:y:2001:i:4:p:317-35
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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