Income Distribution, Political Instability, and Investment
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Date
1996
Author(s)
Perotti, Roberto
Publisher
Elsevier
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Citation
Alesina, Alberto, and Roberto Perotti. 1996. Income distribution, political instability, and investment. European Economic Review 40(6): 1203-1228.
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.
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Item type:Story, Income Distribution, Political Instability, and Investment… : DASH Story 2014-02-09Im an economist and political scientist and I was very saddened by the death of Aaron Swartz. This reminds me of his work and unfortunate death. Indeed the principle of keeping knowledge bifurcated around the world is terrible. One thing that elite schools outside the US had was the fact that if you had wealth AND went to a good school, you could afford the exorbitant cost of textbooks. To be honest, though it does keep faculty active and with some sort of alternative profit motive at G7 schools, it makes education very expensive everywhere else. In local currency, imagine how much those 100 USD textbooks cost the average student at most universities. I KNOW that we all write and teach for a living and its necessary to make education as open and accessible as possible. Lest make textbooks, and their inaccessibility a thing of the past.Item type:Story, Income Distribution, Political Instability, and Investment… : DASH Story 2014-03-17Working on an essay for "Economics of Developing Countries I". The essay question is to critically assess the view that worsening inequality is a cost of economic growth. Found this resource very useful, thank you for making it publicly availableItem type:Story, Income Distribution, Political Instability, and Investment… : DASH Story 2015-12-22Actually I am doing research while I'm working at the Bank of Japan on macroeconomics and politics and Professor Alesina has some pioneering work. Thank you for allowing access.Item type:Story, Income Distribution, Political Instability, and Investment… : DASH Story 2017-02-24Was able to use this as a source for my future thesis. Come from a poorly funded university in the Philippines, so this is really helpful. Thanks!