Public Choice

, Volume 147, Issue 3–4, pp 331–357 | Cite as

Social divisions and institutions: assessing institutional parameter variation

Article

Abstract

This paper investigates the hypothesis that the association between property rights institutions and income is weaker in countries with high social divisions. It argues that social divisions should have a negative effect on perceived institutional inclusiveness, which in turn should depress institutional payoffs. Absent a property rights indicator that captures the perceived inclusiveness of institutions, social divisions should then weaken the observed association between property rights institutions and income. The empirical results support this hypothesis, and highlight the importance of evaluating whether the institutions measure used captures the institutional framework applying to the population at large.

Keywords

Property rights Institutions Social divisions Parameter heterogeneity 

JEL Classification

O10 O17 P14 P26 

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of GothenburgGöteborgSweden

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