Institutional Quality and Income Inequality: A Meta-Analysis and Meta-Regression Analysis

Jaya, I Kadek Eka Prana (2026): Institutional Quality and Income Inequality: A Meta-Analysis and Meta-Regression Analysis.

Abstract

Income inequality continues to exhibit substantial variation across empirical studies examining the role of institutional quality, with findings that remain inconsistent and inconclusive. This study addresses this inconsistency by conducting a meta-analysis and meta-regression of the relationship between institutional quality and income inequality, based on 19 Scopus-indexed studies published between 2015 and 2025. The meta-analysis results indicate that, on average, institutional quality is negatively but insignificantly associated with income inequality, accompanied by substantial heterogeneity across studies. Subgroup analysis by institutional dimensions reveals that among the World Governance Indicators, only rule of law exhibits a negative and statistically significant effect on income inequality, while other dimensions show inconsistent and non-robust effects. Meta-regression analysis further demonstrates that the interaction between institutional quality and data period explains the largest share of heterogeneity, highlighting the importance of temporal horizons. In particular, the inequality-reducing effect of rule of law emerges consistently in long-term studies but not in short-term analyses, suggesting that institutional mechanisms such as contract enforcement and property rights protection require time to translate into distributive outcomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Income Inequality; World Governance Indicators; Institutional Quality; Meta-Analysis; Meta-Regression Analysis
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

References

Adams, S., Ofori, I.K. & Gbolonyo, E.Y. (2025). Energy consumption, democracy, and income inequality in Africa. Empirical Economics, 69, 599–638. https://doi.org/10.1007/s00181-025-02744-x

Adeleye, B.N. (2024). Income Inequality, Human Capital and Institutional Quality in Sub-Saharan Africa. Social Indicators Research, 171, 133–157. https://doi.org/10.1007/s11205-023-03244-0

Antonietti, R., Burlina, C., & Rodríguez-Pose, A. (2025). Digital technology and regional income inequality: Are better institutions the solution? Papers in Regional Science, 104(2). https://doi.org/10.1016/j.pirs.2025.100079

Barra, C. and Papaccio, A. (2025). Institutional Quality and Income Inequality. Quantile Regression Analysis of Regional Italian Data. Journal of Regional Science, 65, 1216-1236. https://doi.org/10.1111/jors.70000

Bennet, D. L., & Niolaev, B. (2016). Factor endowments, the rule of law and structural inequality. Journal of Institutional Economics, 12(4), 773-795. DOI:10.1017/S1744137416000084

Blancheton, B. & Chhorn, D. (2021). Government Intervention, Institutional Quality, and Income Inequality: Evidence from Asia and the Pacific. Asian Development Review, 38(1), 176-206. doi: https://doi.org/10.1162/adev_a_00162

Bonanno, G., Errico, L., Fiorino, N., & Ricciuti, R. (2025). The impact of government size on corruption: A meta-regression analysis. Journal of Economic Surveys, 39, 1727–1757. https://doi.org/10.1111/joes.12672

Chancel, L., Cogneau, D., Gethin, A., Myczkowski, A., & Robiliard, A. (2023). Income inequality in Africa, 1990–2019: Measurement, patterns, determinants. World Development, 163. https://doi.org/10.1016/j.worlddev.2022.106162

Christensen, G., & Miguel, E. (2018). Transparency, reproducibility, and the credibility of economics research. Journal of Economic Literature, 56(3), 920–980.

Davidson, N., Magon, E., & Mariev, O. (2025). Macroeconomic Analysis of the Impact of Economic Complexity on Income Inequality: Does Institutional Quality Matter? HSE Economic Journal, 29(1), 9-41.

Dossou, T. A. M., Kambaye, E. N., Berhe, M. W., & Asongu, S. A. (2023). Moderating effect of ICT on the relationship between governance quality and income inequality in sub-Saharan Africa. Information Development, 41(2), 445-464. https://doi.org/10.1177/02666669231170396 (Original work published 2025)

Heidenreich, M., & Wunder, C. (2008). Patterns of regional inequality in the enlarged Europe. European Sociological Review, 24(1), 19–36. https://doi.org/10. 1093/esr/jcm031

Huynh, C. M., & Tran, N. H. (2023). Financial development, income inequality, and institutional quality: A multi-dimensional analysis. Cogent Economics & Finance, 11(2). https://doi.org/10.1080/23322039.2023.2242128

Ioannidis, J. P. A., Stanley, T. D., & Doucouliagos, H. (2017). The power of bias in economics research. Economic Journal, 127(605), 236–265.

Kaufmann, D., & Aart C. K. (2024). The Worldwide Governance Indicators: Methodology and 2024 Update. Policy Research Working Paper. Washington, DC: World Bank Group

Kennedy, R. S., Potter, M. H., & Font, S. A. (2023). A Meta-Regression of Racial Disparities in Wellbeing Outcomes During and After Foster Care. Trauma, violence & abuse, 24(4), 2711–2725. https://doi.org/10.1177/15248380221111481

Kunawotor, M. E., Bokpin, G. A., & Barnor, C. (2020). Drivers of income inequality in Africa: Does institutional quality matter? African Development Review, 32(4), 718–729. https://doi.org/10.1111/1467-8268.12473

Mun, H. W., Hook, L. S., Niaz Ahmad, M. N., & Mazlan, N. S. (2022). Does Recomposed Institutions Quality Alleviate Extreme Income Inequality? Jurnal Ekonomi Malaysia, 56(2), 1–16. http://dx.doi.org/10.17576/JEM-2022-5602-1

Náplava, R. (2020). Institutional quality and income inequality: Evidence from post-Soviet countries. European Journal of Business Science and Technology, 6(2), 100–112. https://doi.org/10.11118/ejobsat.2020.007

Nguyen, V. B. (2023a). From Fiscal Policy to Income Inequality in Advanced Economies: Does Institutional Quality Hinder? Romanian Journal of Economic Forecasting, 26(1), 165-184.

Nguyen, V. B. (2023b). The Effect of Public Debt on Income Inequality in Advanced Economies: Does Institutional Quality Matter? Ekonomický časopis, 70(9-10), 723-742. DOI:10.31577/ekoncas.2022.09-10.03

Nunoo, J., Taale, F., Ofori, I. K., Mwinlaaru, P. Y., & Adama, A. Y. S. (2024). Human capital and income inequality in Africa: robust governance synergies and thresholds. Cogent Economics & Finance, 12(1). https://doi.org/10.1080/23322039.2024.2417757

Odhiambo, N. M. (2022). Tourism Development and Income Inequality in Sub-Saharan Africa: Does Governance Matter? Journal of Applied Social Science, 16(3), 637-651. https://doi.org/10.1177/19367244221095213

Ofori, I. K., Dossou, T. A. M., & Akadiri, S. S. (2023). Towards the quest to reduce income inequality in Africa: is there a synergy between tourism development and governance? Current Issues in Tourism, 26(3), 429–449. https://doi.org/10.1080/13683500.2021.2021157

Perugini, C. & Golpinar, I. T. (2020). Financial development, income inequality and governance institutions. Panoeconomicus, 69(3), 353-379. https://doi.org/10.2298/PAN191022004P Polacko. (2021). Causes and Consequences of Income Inequality– An Overview. Statistics, Politics and Policy, 12(2), 341-357. https://doi.org/10.1515/spp-2021-0017

Retnawati, H., Apino, E., Kartianom, Djidu, H., & Anazifa, R. D. (2018). Pengantar analisis meta. Parama Publishing.

Stanley, T. D. (2008). Meta-regression methods for detecting and estimating empirical effects in the presence of publication selection. Oxford Bulletin of Economics and statistics, 70(1), 103–127.

Stanley, T.D., Doucouliagos, H., Giles, M., Heckemeyer, J.H., Johnston, R.J., Laroche, P., Nelson, J.P., Paldam, M., Poot, J., Pugh, G., Rosenberger, R.S. and Rost, K. (2013), Meta-Analysis Of Economics Research Reporting Guidelines. Journal of Economic Surveys, 27: 390-394. https://doi.org/10.1111/joes.12008

Tsala, C. O., & Tabi, H. N. (2022). Political decentralization and income inequality in developing countries: Does governance matter? Economics Bulletin, 42(4), 2110–2121.

Uzar, U. (2023). Income Inequality, Institutions, and Freedom of the Press: Potential Mechanisms and Evidence. Sustainability, 15(17), 12927. https://doi.org/10.3390/su151712927

Voto, T. P., & Ngepah, N. (2025). Persistent Income Inequality in Sub-Saharan Africa: The Role of Institution Index and Effective VAT. Economies, 13(3), 81. https://doi.org/10.3390/economies13030081

Wei, Y. D. (1999). Regional inequality in China. Progress in Human Geography, 23(1), 49–59. https://doi.org/10. 1191/030913299676254572