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Inequality, Property Rights Protection, and Economic Growth in Transition Economies: Theory and Russian Evidence

  • Sonin, Konstantin

For economies in transition, the issues of property rights protection provided by the state and implications for economic performance are very important. The paper develops an endogenous growth theory model with incomplete capital markets and the level of public protection of property rights determined by voting (possibly different from the majority voting) and verifies the implications using cross-section data on Russian regions. During transition (since 1992), Russian regions demonstrated enormous differences in growth rates. It is found that these differences may be explained by initial conditions and effectiveness of institutions. Also, positive impact of inequality on the level of public protection of property rights is found and a theoretical explanation for this phenomenon in the framework of the model is provided.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2300.

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Date of creation: Nov 1999
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Handle: RePEc:cpr:ceprdp:2300
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  1. Daniel Berkowitz and David N. DeJong & Daniel Berkowitz and David N. DeJong, 1999. "Accounting for Growth in Post-Soviet Russia," William Davidson Institute Working Papers Series 256, William Davidson Institute at the University of Michigan.
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