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Institutional Traps and Economic Growth

  • Gradstein, M.
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    This paper's point of departure is that low-quality institutions, concentration of political power, and underdevelopment are persistent over time. Its analytical model views an equal distribution of political power as a commitment device to enhance institutional quality thereby promoting growth. The politically powerful coalition contemplates relinquishing of its power, weighing this advantageous consequence against the limit on own appropriative ability that it entails. The possibility of two developmental paths is exhibited: with concentration of political and economic power, low-quality institutions, and slow growth; and a more equal distribution of political and economic resources, high-quality institutions, and faster growth.

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    File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0769.pdf
    File Function: Working Paper Version
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    Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0769.

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    Length: 24
    Date of creation: 2007
    Date of revision:
    Handle: RePEc:cam:camdae:0769
    Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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    2. Rajan, Raghuram G & Zingales, Luigi, 2006. "The Persistence of Underdevelopment: Institutions, Human Capital or Constituencies," CEPR Discussion Papers 5867, C.E.P.R. Discussion Papers.
    3. Nathan Nunn, 2005. "Historical Legacies: A Model Linking Africa's Past to its Current Underdevelopment," Development and Comp Systems 0508008, EconWPA.
    4. Alberto Chong & Mark Gradstein, 2007. "Inequality and Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 454-465, August.
    5. William Jack & Roger Lagunoff, 2003. "Dynamic Enfranchisement," Public Economics 0306002, EconWPA, revised 01 Jul 2003.
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    8. Galor, Oded & Moav, Omer, 2001. "Das Human Kapital," CEPR Discussion Papers 2701, C.E.P.R. Discussion Papers.
    9. Papaioannou, Elias & Siourounis, Gregorios, 2008. "Economic and Social Factors Driving the Third Wave of Democratization," CEPR Discussion Papers 6986, C.E.P.R. Discussion Papers.
    10. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
    11. Ernesto Dal Bo & Rafael Di Tella, 2003. "Capture by Threat," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1123-1152, October.
    12. Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
    13. Konstantin Sonin, 2003. "Why the Rich May Favor Poor Protection of Property Rights," Working Papers w0022, Center for Economic and Financial Research (CEFIR).
    14. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
    15. Oded Galor & Omer Moav, 2004. "Das Human Kapital: A Theory of the Demise of the Class Structure," GE, Growth, Math methods 0410003, EconWPA.
    16. Cervellati Matteo & Fortunato Piergiuseppe & Sunde Uwe, 2012. "Consensual and Conflictual Democratization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-51, December.
    17. Easterly, William, 2001. " The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-35, December.
    18. Mark Gradstein, 2007. "Inequality, democracy and the protection of property rights," Economic Journal, Royal Economic Society, vol. 117(516), pages 252-269, 01.
    19. Daron Acemoglu, 2006. "Modeling Inefficient Institutions," NBER Working Papers 11940, National Bureau of Economic Research, Inc.
    20. Roger Lagunoff, 2006. "Dynamic Stability and Reform of Political Institutions," Levine's Bibliography 784828000000000051, UCLA Department of Economics.
    21. Glaeser, Edward & Scheinkman, Jose & Shleifer, Andrei, 2003. "The injustice of inequality," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 199-222, January.
    22. Matteo Cervellati & Piergiuseppe Fortunato & Uwe Sunde, 2008. "Hobbes to Rousseau: Inequality, Institutions and Development," Economic Journal, Royal Economic Society, vol. 118(531), pages 1354-1384, 08.
    23. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
    24. Daron Acemoglu & James A. Robinson, 2006. "De Facto Political Power and Institutional Persistence," American Economic Review, American Economic Association, vol. 96(2), pages 325-330, May.
    25. Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence From a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 678-704, May.
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