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The Injustice of Inequality

Listed author(s):
  • Edward L. Glaeser
  • Jose Scheinkman
  • Andrei Shleifer

In many countries, the operation of legal, political and regulatory institutions is subverted by the wealthy and the politically powerful for their own benefit. This subversion takes the form of corruption, intimidation, and other forms of influence. We present a model of such institutional subversion – focusing specifically on courts – and of the effects of inequality in economic and political resources on the magnitude of subversion. We then use the model to analyze the consequences of institutional subversion for the law and order environment in the country, as well as for capital accumulation and growth. We illustrate the model with historical evidence from Gilded Age United States and the transition economies of the 1990s. We also present some cross-country evidence consistent with the basic prediction of the model.

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File URL: http://www.economics.harvard.edu/pub/hier/2002/HIER1967.pdf
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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1967.

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Date of creation: 2002
Handle: RePEc:fth:harver:1967
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Web page: http://www.economics.harvard.edu/journals/hier

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  2. Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, "undated". "The Regulation of Entry," Working Paper 19462, Harvard University OpenScholar.
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  13. Bénabou, Roland, 1996. "Inequality and Growth," CEPR Discussion Papers 1450, C.E.P.R. Discussion Papers.
  14. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  15. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, "undated". "Investor Protection and Corporate Governance," Working Paper 19455, Harvard University OpenScholar.
  16. Rudiger Dornbusch & Sebastian Edwards, 1989. "Macroeconomic Populism in Latin America," NBER Working Papers 2986, National Bureau of Economic Research, Inc.
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  24. Edward L. Glaeser, 2001. "Public Ownership in the American City," Harvard Institute of Economic Research Working Papers 1930, Harvard - Institute of Economic Research.
  25. Abhijit V. Banerjee & Andrew F. Newman, 1991. "Risk-Bearing and the Theory of Income Distribution," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 211-235.
  26. Edward L. Glaeser & Andrei Shleifer, 2002. "The Curley Effect," NBER Working Papers 8942, National Bureau of Economic Research, Inc.
  27. Abhijit V. Banerjee & Andrew F. Newman, 1990. "Occupational Choice and the Process of Development," Discussion Papers 911, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  28. Sonin, Konstantin, 1999. "Inequality, Property Rights Protection, and Economic Growth in Transition Economies: Theory and Russian Evidence," CEPR Discussion Papers 2300, C.E.P.R. Discussion Papers.
  29. Roberto Perotti, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 755-776.
  30. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216 Elsevier.
  31. Daron Acemoglu & James A. Robinson, 2002. "Economic Backwardness in Political Perspective," NBER Working Papers 8831, National Bureau of Economic Research, Inc.
  32. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
  33. Robert J. Waldmann, 1992. "Income Distribution and Infant Mortality," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1283-1302.
  34. Edward Glaeser & Simon Johnson & Andrei Shleifer, 2001. "Coase Versus the Coasians," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 853-899.
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