Inequality and Institutions: The Case of Economic Coordination

Posted: 21 May 2014

See all articles by Pablo Beramendi

Pablo Beramendi

Duke University - Department of Political Science

David Rueda

University of Oxford

Date Written: May 2014

Abstract

The understanding of observable associations between institutions and inequality today requires a better grasp of the process driving the selection of economic institutions, in particular wage bargaining centralization agreements, as the outcome of a distributive conflict in which inequality itself plays a prominent role. Low levels of inequality facilitated the adoption of encompassing wage centralization agreements during the early twentieth century in Europe, thereby creating a long-term association between low inequality and high centralization that, for a large subset of cases, remained stable throughout the century. We develop a theoretical argument as to why inequality should lead to lower levels of coordination and test it against competing hypotheses on the basis of a database on 11 OECD nations between the 1910s and the 1950s.

Suggested Citation

Beramendi, Pablo and Rueda, David, Inequality and Institutions: The Case of Economic Coordination (May 2014). Annual Review of Political Science, Vol. 17, pp. 251-271, 2014, Available at SSRN: https://ssrn.com/abstract=2439630 or http://dx.doi.org/10.1146/annurev-polisci-032211-210535

Pablo Beramendi (Contact Author)

Duke University - Department of Political Science ( email )

140 Science Drive (Gross Hall), 2nd floor
Duke University Mailcode: 90204
Durham, NC 27708-0204
United States

David Rueda

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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