Munich Personal RePEc Archive

Statehood experience and income inequality: A historical perspective

Vu, Trung V. (2020): Statehood experience and income inequality: A historical perspective.

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Does state history matter for contemporary income distribution? Employing data for up to 153 countries, this paper examines the extent to which accumulated statehood experience, obtained over six millennia, affects the current level of income inequality. To capture the historical depth of experience with state-level institutions, I use an extended measure of state history, constructed from 3500BCE to 2000CE. The results indicate that the relationship between state history and income inequality exhibits a U-shaped pattern. Specifically, statehood experience up to a point helps reduce income inequality. Nevertheless, an excessive duration of state history is conducive to more unequal income distribution. These findings are largely robust to performing a battery of sensitivity tests.

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