Post by Sapphire Capital on Aug 27, 2008 3:19:30 GMT 4
Hobbes to Rousseau: Inequality, Institutions and Development
Matteo Cervellati
University of Bologna - Department of Economics; Institute for the Study of Labor (IZA); IAE Barcelona
Piergiuseppe Fortunato
University of Bologna - Faculty of Political Science
Uwe Sunde
Institute for the Study of Labor (IZA)
The Economic Journal, Vol. 118, No. 531, pp. 1354-1384, August 2008
Abstract:
This article studies the endogenous evolution of economic and political institutions and the interdependencies with the process of economic development. Favourable economic institutions in the form of a state of law and absence of societal conflict arise in equilibrium. Democracies are neither necessary nor sufficient to implement a state of law, even if they may be instrumental. Efficient oligarchies can emerge and persist supported by the consensus of all groups. A taxonomy of politico-economic equilibria shows the endogenous evolution of institutions depending on economic inequality and natural resource abundance, implying a non-monotonic relationship between inequality and institutional quality.
papers.ssrn.com/sol3/papers.cfm?abstract_id=1227176
Matteo Cervellati
University of Bologna - Department of Economics; Institute for the Study of Labor (IZA); IAE Barcelona
Piergiuseppe Fortunato
University of Bologna - Faculty of Political Science
Uwe Sunde
Institute for the Study of Labor (IZA)
The Economic Journal, Vol. 118, No. 531, pp. 1354-1384, August 2008
Abstract:
This article studies the endogenous evolution of economic and political institutions and the interdependencies with the process of economic development. Favourable economic institutions in the form of a state of law and absence of societal conflict arise in equilibrium. Democracies are neither necessary nor sufficient to implement a state of law, even if they may be instrumental. Efficient oligarchies can emerge and persist supported by the consensus of all groups. A taxonomy of politico-economic equilibria shows the endogenous evolution of institutions depending on economic inequality and natural resource abundance, implying a non-monotonic relationship between inequality and institutional quality.
papers.ssrn.com/sol3/papers.cfm?abstract_id=1227176