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Murawski Final MA Thesis.pdf (1.22 MB)

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Financial Development, State Capacity, and Inequality Distributions

Murawski, Michael, Murawski
http://orcid.org/0000-0002-2820-6970
http://rave.ohiolink.edu/etdc/view?acc_num=osu1523981143011671

Abstract Details

2018, Master of Arts, Ohio State University, Political Science.
According to empirical data, income inequality within countries has increased in the past several decades, despite theoretical models which predicted the opposite. During this same time period, levels of financial development have also increased. Therefore, what impact does financial development have on income inequality? Current theoretical models predict that financial development should decrease inequality in a negative linear or negative non-linear fashion, yet the direction of this relationship is still empirically ambiguous as there is evidence supporting both sides. Furthermore, in order to elucidate this relationship, I incorporate political science variables to assess this question. Measurements of state capacity, the idea that states need a competent administrative capacity to successfully implement laws throughout their territory, are included because state capacity is indirectly linked to mechanisms behind income inequality, including financial development. Thus, what is the relationship between state capacity, financial development, and income inequality? Using an unbalanced panel dataset of 134 developed and developing states from the years 1960 to 2016 and more appropriate regression estimation techniques, I find evidence which suggests current theories do not hold up to scrutiny. Rather, the relationship between financial development and income inequality is positive and linear. Additionally, the results are ambiguous as to how state capacity acts as a mediating variable in this relationship but we have preliminary evidence which suggests that state capacity dilutes financial development’s income inequality inducing affects. Furthermore, I find that different combinations of government, business, and labor relations impact income inequality and financial development’s influence as well. These findings have important implications for public policy.
Sarah Brooks (Advisor)
Marcus Kurtz (Committee Member)
64 p.
Political Science
financial development; income inequality; inequality; state capacity; institutions; economics; political science; political economy

Recommended Citations

Citations

  • Murawski, Murawski, M. (2018). Financial Development, State Capacity, and Inequality Distributions [Master's thesis, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1523981143011671

    APA Style (7th edition)

  • Murawski, Murawski, Michael. Financial Development, State Capacity, and Inequality Distributions. 2018. Ohio State University, Master's thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1523981143011671.

    MLA Style (8th edition)

  • Murawski, Murawski, Michael. "Financial Development, State Capacity, and Inequality Distributions." Master's thesis, Ohio State University, 2018. http://rave.ohiolink.edu/etdc/view?acc_num=osu1523981143011671

    Chicago Manual of Style (17th edition)

osu1523981143011671
477
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This open access ETD is published by The Ohio State University and OhioLINK.