Income Distribution, Political Instability, and Investment

DSpace/Manakin Repository

Income Distribution, Political Instability, and Investment

Citable link to this page

. . . . . .

Title: Income Distribution, Political Instability, and Investment
Author: Perotti, Roberto; Alesina, Alberto

Note: Order does not necessarily reflect citation order of authors.

Citation: Alesina, Alberto, and Roberto Perotti. 1996. Income distribution, political instability, and investment. European Economic Review 40(6): 1203-1228.
Full Text & Related Files:
Abstract: This paper successfully tests on a sample of 71 countries for the period 1960–85 the following hypotheses. Income inequality, by fuelling social discontent, increases sociopolitical instability. The latter, by creating uncertainty in the politico-economic environment, reduces investment. As a consequence, income inequality and investment are inversely related. Since investment is a primary engine of growth, this paper identifies a channel for an inverse relationship between income inequality and growth. We measure socio-political instability with indices which capture the occurrence of more or less violent phenomena of political unrest and we test our hypotheses by estimating a two-equation model in which the endogenous variables are investment and an index of socio-political instability. Our results are robust to sensitivity analysis on the specification of the model and the measure of political instability, and are unchanged when the model is estimated using robust regression techniques.
Published Version: http://dx.doi.org/10.1016/0014-2921(95)00030-5
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:4553018

Show full Dublin Core record

This item appears in the following Collection(s)

  • FAS Scholarly Articles [6868]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
 
 

Search DASH


Advanced Search
 
 

Submitters