Institutional persistence, income inequality, and individual attitudes

Abstract

Aspects of institutional quality vary substantially across countries, but are quite persistent over time. Further, institutional quality is correlated with income inequality, even among democracies. To account for these regularities, we offer a model where individual attitudes, toward inequality or trust in government, feature in voters’ preferences. The model displays path dependence, whereby inequality and institutional quality feed each other. It is suggested that this may explain the long shadow of historical legacies of postcolonial experiences. Simple correlations of reported attitudes using data from the World Values Surveys are consistent with the model.