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Efficiency Of Institutions, Political Stability And Income Dynamics

Author

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  • Fabrizio Carmignani

    (United Nations Economic Commission for Europe)

Abstract

In a simple theoretical framework, the quality of institutions affects individual’s investment decisions, and hence income levels and distribution. When institutions deteriorates and inequalities increase, the incumbent undertakes redistributive taxation to maintain political support. The quality of institutions and the extent of redistribution depend on the degree of government responsiveness to citizens and on the credibility of the political opposition to the incumbent. The econometric analysis is based on both single equation models and systems of equations. Good institutions are found to reduce the Gini coefficient and to increase average income, growth, and income of the poor. However, some non-linearites are detected in the institutions-Gini relationship.

Suggested Citation

  • Fabrizio Carmignani, 2005. "Efficiency Of Institutions, Political Stability And Income Dynamics," Public Economics 0503007, EconWPA.
  • Handle: RePEc:wpa:wuwppe:0503007
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    References listed on IDEAS

    as
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    Cited by:

    1. Bušs, Ginters, 2007. "The role of authoritative media in Economics," MPRA Paper 17893, University Library of Munich, Germany.
    2. Anokhin, Sergey & Schulze, William S., 2009. "Entrepreneurship, innovation, and corruption," Journal of Business Venturing, Elsevier, vol. 24(5), pages 465-476, September.
    3. repec:ibn:ibrjnl:v:10:y:2017:i:6:p:75-86 is not listed on IDEAS

    More about this item

    Keywords

    Institutions; income distribution; poverty; per-capita income; growth;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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