Inequality, extractive institutions, and growth in nondemocratic regimes

Mizuno, Nobuhiro; Naito, Katsuyuki; Okazawa, Ryosuke

doi:10.1007/s11127-016-0387-7

Cited by 11 publications

(3 citation statements)

References 83 publications

(68 reference statements)

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“…Systemic conditions deter international competitiveness. Structural extractive frameworks impede the development of conditions required for an adequate global competition insertion [108][109][110][111]. Emerging economies are constrained by brain drain, groups of grievance, factionalized elites, and state legitimacy, as shown in this study's results.…”

Section: Discussion Of Findingsmentioning

confidence: 61%

Emerging Economies’ Institutional Quality and International Competitiveness: A PLS-SEM Approach

2021

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The home country’s institutional framework determines the capacity to compete in the global arena. This paper discusses the linkage between institutional quality (IQ) and international competitiveness (IC). We measured institutions’ quality in emerging economies through the use of selected indicators between 2007–2017. To evaluate the proposed IQ constructs and their relationship with IC, we applied partial least squares – structural equation modeling (PLS-SEM) analysis. The model outcomes suggest that political and lack of systemic conditions have a significant and negative effect on international competitiveness, while science, technology, engineering and mathematics (STEM) resource conditions have a significant and positive effect.

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Section: Discussion Of Findingsmentioning

confidence: 61%

Emerging Economies’ Institutional Quality and International Competitiveness: A PLS-SEM Approach

2021

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“…A society with a more equal wealth distribution generally serves as a fertile ground for good institutions. On the contrary, a society with an unequal distribution of income may be unconducive for good institutions to flourish (Chong & Gradstein, 2019;Mizuno, Naito, & Okazawa, 2017). In an unequal society, the wealthy -with their ample resources -may benefit from shaping the state institutions in their favor.…”

Section: Discussionmentioning

confidence: 99%

“Getting to Denmark" from Indonesia: Starting from State Institutions or Tax Capacity?

Iswahyudi¹

2021

JIEB

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Introduction/Main Objectives: This paper is aimed at answering the following research questions: Where should Indonesia’s journey toward a prosperous society start from? Should state institutions be improved first to increase the tax collection necessary to finance this journey? Or should the tax capacity be improved first to help improve the institutions? Background Problems: Maintaining good quality state institutions requires fiscal support and, vice versa, maintaining fiscal support through tax revenue requires the existence of good quality state institutions. This paper empirically examines which of these two aspects needs to be improved first to achieve a better society for Indonesians. Novelty: To the best of the author’s knowledge this paper may be the first that tries to empirically explore the causal relationships between the quality of Indonesia’s state institutions and its tax capacity. Research Methods: Answers to the research questions were approached by employing a vector error-correction model of governance indicators and tax revenue data for Indonesia, covering the period from 2002 to 2017. Finding / Results: It has been found that, for Indonesia, the quality of the state institutions and the tax capacity did not have a causal relationship in any direction. Conclusion: Indonesia seems to be caught in a dilemma: On one side, choosing the strategy of improving the quality of the institutions first may not be sustainable because it is unlikely to lead to improvements in the tax capacity, thus the prospects for sustaining good-quality institutions may be uncertain due to the possible lack of fiscal support. On the other hand, improving the tax capacity first does not seem to be a reliable strategy either because it may not result in better quality state institutions, hence revenue mobilization efforts might not be effective due to the incomplete support provided by the poor-quality institutions

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“…The paper also related with studies analysing the role of inequality in determining the institutional quality (Sokoloff and Engerman (2000), Glaeser et al (2003), Gradstein (2007), Mizuno et al (2017) among others). In our set-up, a higher level of inequality provides a condition for the formation of the coalition between the richest and poorest parts of the society supporting a highredistribution, no-entry policy.…”

Section: Related Literaturementioning

confidence: 99%

Crony Capitalism as An Electoral Outcome

Veselov

2019

SSRN Journal

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When property rights are poorly secured, crony relations i.e. the tight connection between the owners of major firms and the government are the primary informal mechanism securing the property. However, this institutional framework creates high entry barriers on markets. We propose a theory that explains why in a democracy the majority of voters may prefer this type of institutions. This paper develops a simple voting model with heterogeneous agents, which differ in their skills and wealth endowment. We show that if the policy space is two-dimensional, the wealthy elite and low-skilled workers may form a majority coalition, supporting the regime with high-entry barriers. In this case, the wealthy elite agrees on a higher level of redistribution, preferred by the least skilled agents. We compare the possibility of this outcome for different voting rules, and prove that the electoral support of crony capitalism is more likely for countries with a low level of human capital and high income and skill inequality. The model is also able to explain different effects of democratization process on the institutional structure of the society.

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Inequality, extractive institutions, and growth in nondemocratic regimes

Cited by 11 publications

References 83 publications

Emerging Economies’ Institutional Quality and International Competitiveness: A PLS-SEM Approach

Emerging Economies’ Institutional Quality and International Competitiveness: A PLS-SEM Approach

“Getting to Denmark" from Indonesia: Starting from State Institutions or Tax Capacity?

Crony Capitalism as An Electoral Outcome

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