This paper develops a Schumpeterian growth model in which institutional quality matters for inequality and growth. In particular, asymmetric information between political authorities and rent-seeking bureaucratic agencies diverts resources from innovative activities – crucial for development to take off in middle and low income countries – and unnecessarily exacerbates income inequality. The theoretical predictions not only match empirical facts on inequality, institutional quality and growth well documented in the literature, but are easily assessed in two groups of Latin American and African countries, as shown in the final calibration analysis.
Spinesi, L. (2009). Rent-Seeking Bureaucracies, Inequality, and Growth. JOURNAL OF DEVELOPMENT ECONOMICS, 90, 244-257 [10.1016/j.jdeveco.2008.09.009].
Rent-Seeking Bureaucracies, Inequality, and Growth.
SPINESI, LUCA
2009-01-01
Abstract
This paper develops a Schumpeterian growth model in which institutional quality matters for inequality and growth. In particular, asymmetric information between political authorities and rent-seeking bureaucratic agencies diverts resources from innovative activities – crucial for development to take off in middle and low income countries – and unnecessarily exacerbates income inequality. The theoretical predictions not only match empirical facts on inequality, institutional quality and growth well documented in the literature, but are easily assessed in two groups of Latin American and African countries, as shown in the final calibration analysis.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.