Political and Economic Inequities and the Shaping of Institutions and Redistribution

Alberto Chong, Mark Gradstein

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


This article studies the joint effect of political and economic inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The effect of the former is to increase productive investment, and the effect of the latter is to decrease it—with resulting ambiguous implications for economic growth. Testing these predictions empirically in a panel of countries, we find that inequality has a negative effect on both institutional quality and redistribution.

Original languageEnglish
Pages (from-to)952-971
Number of pages20
JournalSouthern Economic Journal
Issue number4
StatePublished - 1 Apr 2017

ASJC Scopus subject areas

  • Economics and Econometrics


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