Statehood experience and income inequality: A historical perspective

This study investigates the effects of accumulated statehood experience on contemporary income inequality. Previous studies reveal numerous “proximate” causes inequality, but little is known about fundamental determinants this widespread social concern. The novelty paper lies in adoption a historical approach that sheds light deep roots cross-country differences central hypothesis experience, measured by extended state history index, exerts persistent impacts present-day Employing data for 128 countries, I find strong and robust evidence U-shaped relationship between Accumulated up to point, strengthens fiscal legal capabilities, leading more egalitarian distribution income. However, excessive associated with early emergence extractive institutions powerful elites, resulting Further analyses suggest distributional are mediated through institutions.