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Public Choice

, Volume 155, Issue 1–2, pp 43–60 | Cite as

Inequality in developing economies: the role of institutional development

  • Adalgiso Amendola
  • Joshy Easaw
  • Antonio SavoiaEmail author
Article

Abstract

This paper studies the distributive impact of institutional change in developing countries. In such economies, property rights systems may preserve the interests of an influential minority, who can control key-markets, access to assets and investment opportunities, especially if they enjoy disproportionate political power. We test this hypothesis using cross-section and panel data methods on a sample of low- and middle-income economies from Africa, Asia and Latin America. Results suggest that: (a) increasing property rights protection increases income inequality; (b) this effect is larger in low-democracy environments; (c) some countries have developed political institutions capable of counterbalancing this effect.

Keywords

Inequality Developing economies Institutions Property rights Democracy 

JEL Classification

O15 O17 D70 

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  • Adalgiso Amendola
    • 1
  • Joshy Easaw
    • 2
  • Antonio Savoia
    • 3
    Email author
  1. 1.DISESUniversitá di SalernoFisciano (SA)Italy
  2. 2.Economics DepartmentUniversity of Wales SwanseaSwanseaUK
  3. 3.Business School, Dept. EconomicsUniversity of ExeterExeterUK

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