Polarization, Politics, and Property Rights : Links between Inequality and Growth

Most efforts to trace the effects of income inequality on growth have focused on redistribution. However, empirical investigation has not substantiated either the positive association of income inequality with redistribution or the negative associa...

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Main Authors:	Keefer, Philip, Knack, Stephen
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE VALUE AGRICULTURE ASSET INEQUALITY BANKRUPTCY BUREAUCRACY BUREAUCRATIC DELAYS BUREAUCRATIC QUALITY BUREAUCRATIC STRUCTURE BUSINESS ENVIRONMENT CIVIL LIBERTIES COMPETITION POLICY CORRUPTION COUNTRY COVERAGE COUNTRY INVESTIGATIONS CRISES DECISION MAKING DEPENDENT VARIABLE DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIES OF SCALE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL SUPPORT ENFORCEABILITY EQUILIBRIUM ETHNIC HETEROGENEITY ETHNIC HOMOGENEITY ETHNIC TENSION EXOGENOUS SHOCKS EXPENDITURES GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING IMPACT OF INEQUALITY INCOME INCOME DIFFERENCES INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVELS INCOMES INCREASE GROWTH INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INEQUALITY DATA INEQUALITY OBSERVATIONS INFORMATION ASYMMETRIES INSTITUTIONAL ARRANGEMENTS LABOR FORCE LAND INEQUALITY LEGISLATION LINEAR RELATIONSHIP MEASURED INEQUALITY MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTER THEOREM MIDDLE CLASS NATIONAL DEFENSE NEGATIVE EFFECT NEGATIVE RELATIONSHIP 0 HYPOTHESIS OIL PER CAPITA INCOME POLARIZATION MEASURES POLARIZED SOCIETIES POLICY CHANGE POLICY CHANGES POLICY ENVIRONMENT POLICY IMPLICATIONS POLICY ISSUES POLICY MAKERS POLICY MAKING POLICY OUTCOMES POLICY REFORMS POLICY RESEARCH POLITICAL DEVELOPMENT POLITICAL FREEDOMS POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE PRIVATE PROPERTY PRIVATE SECTOR PRODUCTION PROCESSES PROPERTY RIGHTS QUALITY REDISTRIBUTIVE POLICIES RULE OF LAW SECURE PROPERTY RIGHTS SUBJECTIVE EVALUATIONS TAX RATES TAX REVENUES TRADEOFFS UNEQUAL DISTRIBUTION VOTERS WAGES
Online Access:	http://documents.worldbank.org/curated/en/2000/08/693337/polarization-politics-property-rights-links-between-inequality-growth http://hdl.handle.net/10986/19802

id	okr-10986-19802
recordtype	oai_dc
spelling	okr-10986-198022021-04-23T14:03:46Z Polarization, Politics, and Property Rights : Links between Inequality and Growth Keefer, Philip Knack, Stephen ABSOLUTE VALUE AGRICULTURE ASSET INEQUALITY BANKRUPTCY BUREAUCRACY BUREAUCRATIC DELAYS BUREAUCRATIC QUALITY BUREAUCRATIC STRUCTURE BUSINESS ENVIRONMENT CIVIL LIBERTIES COMPETITION POLICY CORRUPTION COUNTRY COVERAGE COUNTRY INVESTIGATIONS CRISES DECISION MAKING DEPENDENT VARIABLE DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIES OF SCALE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL SUPPORT ENFORCEABILITY EQUILIBRIUM ETHNIC HETEROGENEITY ETHNIC HOMOGENEITY ETHNIC TENSION EXOGENOUS SHOCKS EXPENDITURES GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING IMPACT OF INEQUALITY INCOME INCOME DIFFERENCES INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVELS INCOMES INCREASE GROWTH INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INEQUALITY DATA INEQUALITY OBSERVATIONS INFORMATION ASYMMETRIES INSTITUTIONAL ARRANGEMENTS LABOR FORCE LAND INEQUALITY LEGISLATION LINEAR RELATIONSHIP MEASURED INEQUALITY MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTER THEOREM MIDDLE CLASS NATIONAL DEFENSE NEGATIVE EFFECT NEGATIVE RELATIONSHIP 0 HYPOTHESIS OIL PER CAPITA INCOME POLARIZATION MEASURES POLARIZED SOCIETIES POLICY CHANGE POLICY CHANGES POLICY ENVIRONMENT POLICY IMPLICATIONS POLICY ISSUES POLICY MAKERS POLICY MAKING POLICY OUTCOMES POLICY REFORMS POLICY RESEARCH POLITICAL DEVELOPMENT POLITICAL FREEDOMS POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE PRIVATE PROPERTY PRIVATE SECTOR PRODUCTION PROCESSES PROPERTY RIGHTS QUALITY REDISTRIBUTIVE POLICIES RULE OF LAW RULE OF LAW SECURE PROPERTY RIGHTS SUBJECTIVE EVALUATIONS TAX RATES TAX REVENUES TRADEOFFS UNEQUAL DISTRIBUTION VOTERS WAGES Most efforts to trace the effects of income inequality on growth have focused on redistribution. However, empirical investigation has not substantiated either the positive association of income inequality with redistribution or the negative association of redistribution with economic growth. The authors analyze the effects of inequality in the broader context of social polarization. They argue that social polarization, whether rooted in income inequality or in ethnic tension, makes large changes in current policies (including those guaranteeing the security of contract and property rights) more likely under a wide range of institutional arrangements. The resulting uncertainties in the policy and contractual environment hinder growth. They find strong empirical support for both parts of this argument. The policy implications of their argument are quite distinct from those of arguments that inequality reduces growth by increasing pressures for redistribution. If redistributive policies per se were to blame for the low growth resulting from inequality, governments that seek to mitigate income inequality must inevitably confront a tradeoff between equity and growth. If, on the other hand, the insecurity of property rights slows growth in unequal or otherwise polarized societies, governments that commit over the long run to particular redistributive policies incur less risk of slowing economic growth. Fiscal redistribution that reduces inequality may actually increase growth by reducing the risks of political uncertainty. 2014-08-27T21:56:07Z 2014-08-27T21:56:07Z 2000-08 http://documents.worldbank.org/curated/en/2000/08/693337/polarization-politics-property-rights-links-between-inequality-growth http://hdl.handle.net/10986/19802 English en_US Policy Research Working Paper;No. 2418 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ABSOLUTE VALUE AGRICULTURE ASSET INEQUALITY BANKRUPTCY BUREAUCRACY BUREAUCRATIC DELAYS BUREAUCRATIC QUALITY BUREAUCRATIC STRUCTURE BUSINESS ENVIRONMENT CIVIL LIBERTIES COMPETITION POLICY CORRUPTION COUNTRY COVERAGE COUNTRY INVESTIGATIONS CRISES DECISION MAKING DEPENDENT VARIABLE DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIES OF SCALE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL SUPPORT ENFORCEABILITY EQUILIBRIUM ETHNIC HETEROGENEITY ETHNIC HOMOGENEITY ETHNIC TENSION EXOGENOUS SHOCKS EXPENDITURES GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING IMPACT OF INEQUALITY INCOME INCOME DIFFERENCES INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVELS INCOMES INCREASE GROWTH INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INEQUALITY DATA INEQUALITY OBSERVATIONS INFORMATION ASYMMETRIES INSTITUTIONAL ARRANGEMENTS LABOR FORCE LAND INEQUALITY LEGISLATION LINEAR RELATIONSHIP MEASURED INEQUALITY MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTER THEOREM MIDDLE CLASS NATIONAL DEFENSE NEGATIVE EFFECT NEGATIVE RELATIONSHIP 0 HYPOTHESIS OIL PER CAPITA INCOME POLARIZATION MEASURES POLARIZED SOCIETIES POLICY CHANGE POLICY CHANGES POLICY ENVIRONMENT POLICY IMPLICATIONS POLICY ISSUES POLICY MAKERS POLICY MAKING POLICY OUTCOMES POLICY REFORMS POLICY RESEARCH POLITICAL DEVELOPMENT POLITICAL FREEDOMS POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE PRIVATE PROPERTY PRIVATE SECTOR PRODUCTION PROCESSES PROPERTY RIGHTS QUALITY REDISTRIBUTIVE POLICIES RULE OF LAW RULE OF LAW SECURE PROPERTY RIGHTS SUBJECTIVE EVALUATIONS TAX RATES TAX REVENUES TRADEOFFS UNEQUAL DISTRIBUTION VOTERS WAGES
spellingShingle	ABSOLUTE VALUE AGRICULTURE ASSET INEQUALITY BANKRUPTCY BUREAUCRACY BUREAUCRATIC DELAYS BUREAUCRATIC QUALITY BUREAUCRATIC STRUCTURE BUSINESS ENVIRONMENT CIVIL LIBERTIES COMPETITION POLICY CORRUPTION COUNTRY COVERAGE COUNTRY INVESTIGATIONS CRISES DECISION MAKING DEPENDENT VARIABLE DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIES OF SCALE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL SUPPORT ENFORCEABILITY EQUILIBRIUM ETHNIC HETEROGENEITY ETHNIC HOMOGENEITY ETHNIC TENSION EXOGENOUS SHOCKS EXPENDITURES GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING IMPACT OF INEQUALITY INCOME INCOME DIFFERENCES INCOME DISTRIBUTIONS INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVELS INCOMES INCREASE GROWTH INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INEQUALITY DATA INEQUALITY OBSERVATIONS INFORMATION ASYMMETRIES INSTITUTIONAL ARRANGEMENTS LABOR FORCE LAND INEQUALITY LEGISLATION LINEAR RELATIONSHIP MEASURED INEQUALITY MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTER THEOREM MIDDLE CLASS NATIONAL DEFENSE NEGATIVE EFFECT NEGATIVE RELATIONSHIP 0 HYPOTHESIS OIL PER CAPITA INCOME POLARIZATION MEASURES POLARIZED SOCIETIES POLICY CHANGE POLICY CHANGES POLICY ENVIRONMENT POLICY IMPLICATIONS POLICY ISSUES POLICY MAKERS POLICY MAKING POLICY OUTCOMES POLICY REFORMS POLICY RESEARCH POLITICAL DEVELOPMENT POLITICAL FREEDOMS POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE PRIVATE PROPERTY PRIVATE SECTOR PRODUCTION PROCESSES PROPERTY RIGHTS QUALITY REDISTRIBUTIVE POLICIES RULE OF LAW RULE OF LAW SECURE PROPERTY RIGHTS SUBJECTIVE EVALUATIONS TAX RATES TAX REVENUES TRADEOFFS UNEQUAL DISTRIBUTION VOTERS WAGES Keefer, Philip Knack, Stephen Polarization, Politics, and Property Rights : Links between Inequality and Growth
relation	Policy Research Working Paper;No. 2418
description	Most efforts to trace the effects of income inequality on growth have focused on redistribution. However, empirical investigation has not substantiated either the positive association of income inequality with redistribution or the negative association of redistribution with economic growth. The authors analyze the effects of inequality in the broader context of social polarization. They argue that social polarization, whether rooted in income inequality or in ethnic tension, makes large changes in current policies (including those guaranteeing the security of contract and property rights) more likely under a wide range of institutional arrangements. The resulting uncertainties in the policy and contractual environment hinder growth. They find strong empirical support for both parts of this argument. The policy implications of their argument are quite distinct from those of arguments that inequality reduces growth by increasing pressures for redistribution. If redistributive policies per se were to blame for the low growth resulting from inequality, governments that seek to mitigate income inequality must inevitably confront a tradeoff between equity and growth. If, on the other hand, the insecurity of property rights slows growth in unequal or otherwise polarized societies, governments that commit over the long run to particular redistributive policies incur less risk of slowing economic growth. Fiscal redistribution that reduces inequality may actually increase growth by reducing the risks of political uncertainty.
format	Publications & Research :: Policy Research Working Paper
author	Keefer, Philip Knack, Stephen
author_facet	Keefer, Philip Knack, Stephen
author_sort	Keefer, Philip
title	Polarization, Politics, and Property Rights : Links between Inequality and Growth
title_short	Polarization, Politics, and Property Rights : Links between Inequality and Growth
title_full	Polarization, Politics, and Property Rights : Links between Inequality and Growth
title_fullStr	Polarization, Politics, and Property Rights : Links between Inequality and Growth
title_full_unstemmed	Polarization, Politics, and Property Rights : Links between Inequality and Growth
title_sort	polarization, politics, and property rights : links between inequality and growth
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2000/08/693337/polarization-politics-property-rights-links-between-inequality-growth http://hdl.handle.net/10986/19802
_version_	1764441435894972416

Polarization, Politics, and Property Rights : Links between Inequality and Growth

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