Institutional Quality and Income Inequality in the Advanced Countries

  • Kosta Josifidis University of Novi Sad, Faculty of Economics, Department of European and International Economics and Business, Serbia
  • Novica Supić University of Novi Sad, Faculty of Economics, Department of European and International Economics and Business, Serbia
  • Emilija Beker Pucar University of Novi Sad, Faculty of Economics, Department of European and International Economics and Business, Serbia

Abstract

The purpose of this paper is to shed more light on the effects of changes in quality of economic, legal and political institutions on income inequality in the advanced countries over the last two decades. Using the robust panel model on a sample of 21 OECD countries, it is found that the impact of elitization of society is more pronounced than the impact of unionization on income redistribution, but both effects are less expressed in comparison to the influence of institutional changes on redistribution. In a globalized economy, insufficient redistribution and high inequality might be interpreted as the consequence of institutional inertia to disruptive technological and business changes.


Key words: Income inequality, Institutions, Redistribution, Elites.
JEL: D63, H23.


Cilj rada je da pojasni efekte promena u kvalitetu ekonomskih, pravnih i političkih institucija na nejednakost dohotka u razvijenim zemljama tokom poslednje dve decenije. Upotrebom robustnog panel modela na uzorku od 21 zemlje OECD-a, utvrđeno je da je uticaj elitizacije društva izraženiji od uticaja sindikalnog organozovanja na preraspodelu dohotka, ali oba uticaja su manje izražena u poređenju sa uticajem institucionalnih promena na preraspodelu. U globalnoj ekonomiji, nedovoljna preraspodela i visoka nejednakost može da se tumači kao posledica institucionalne inercije na štetne tehnološke i poslovne promene.


Ključne reči: Nejednakost dohotka, institucije, preraspodela, elite.

How to Cite
Josifidis K., Supić N., & Beker Pucar E. (2017). Institutional Quality and Income Inequality in the Advanced Countries. Panoeconomicus, 64(2), 169-188. doi:10.2298/PAN1702169J