TY  - RPRT
        AU  - Cervellati, Matteo
AU  - Fortunato, Piergiuseppe
AU  - Sunde, Uwe
        TI  - Hobbes to Rousseau: Inequality, Institutions, and Development
        PY  - 2005/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1450
        UR  - https://www.iza.org/index.php/publications/dp1450
        AB  - We analyze the endogenous evolution of economic and political institutions and the interdependencies with the process of economic development. Favorable economic institutions ensure the appropriability of rents in form of a state of law. We study the conditions under which a state of law can be implemented under oligarchy, and when democratization is necessary. Inequality in endowments and incomes prolongs the absence of good institutions and delays democratization. Conversely, institutions shape the income distribution. Simulations illustrate how inequality affects the development process and may lead to overtaking and divergence. The implications are in line with historical and empirical evidence.
        KW  - institutions
KW  - inequality
KW  - democratization
KW  - state of law
KW  - long-term development
        ER  -