TY - UNPB

T1 - A novel explanation for growing inequality? Exploring the effect of Special-Interest Groups

AU - Rossignoli, Domenico

PY - 2013

Y1 - 2013

N2 - The debate on inequality determinants has mostly focused on economic factors. Yet there is no
consensus in the literature on the underlying causes of income inequality. However, an
increasing number of scholars argue that income inequality is related to institutional and cultural
factors, as well as economic ones. In particular, case-studies reveal that fiscal policy is affected
by pressure groups in advanced economies. On this premise, I rely on Mancur Olson (1965)’s
theories on the effect of group activities on economic performance to explore the possible link
between the number of special-interest groups (SIGs) in a country and its income inequality. The
focus of this study is on long-run determinants of income inequality. Thus, assuming incomplete
group formation, this dissertation tests whether the number of SIGs in a country is related with
the value of its income inequality as expressed by the Gini index. The adopted methodology
consists in a panel fixed-effect regression on a sample of observations on 48 countries in the
period 1985-2005. The results provide a new understanding about income inequality
determinants, by identifying a non-linear relationship between the number of SIGs and income
inequality. The paper provides as well an exploration on a possible source of heterogeneity of the
SIGs effect on inequality, identified in the level of GDP per capita.

AB - The debate on inequality determinants has mostly focused on economic factors. Yet there is no
consensus in the literature on the underlying causes of income inequality. However, an
increasing number of scholars argue that income inequality is related to institutional and cultural
factors, as well as economic ones. In particular, case-studies reveal that fiscal policy is affected
by pressure groups in advanced economies. On this premise, I rely on Mancur Olson (1965)’s
theories on the effect of group activities on economic performance to explore the possible link
between the number of special-interest groups (SIGs) in a country and its income inequality. The
focus of this study is on long-run determinants of income inequality. Thus, assuming incomplete
group formation, this dissertation tests whether the number of SIGs in a country is related with
the value of its income inequality as expressed by the Gini index. The adopted methodology
consists in a panel fixed-effect regression on a sample of observations on 48 countries in the
period 1985-2005. The results provide a new understanding about income inequality
determinants, by identifying a non-linear relationship between the number of SIGs and income
inequality. The paper provides as well an exploration on a possible source of heterogeneity of the
SIGs effect on inequality, identified in the level of GDP per capita.

KW - Diseguaglianza economica

KW - Gruppi di interesse

KW - Income Inequality

KW - Political Economy

KW - Special-Interest Groups

KW - Diseguaglianza economica

KW - Gruppi di interesse

KW - Income Inequality

KW - Political Economy

KW - Special-Interest Groups

UR - http://hdl.handle.net/10807/59638

UR - http://centridiricerca.unicatt.it/scienze_cognitive_comunicazione_cscc0213.pdf

M3 - Working paper

BT - A novel explanation for growing inequality? Exploring the effect of Special-Interest Groups

ER -