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Abstract:
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The objective of this thesis is to investigate the relationship between property rights, contracting institutions and the distribution of income across 39 former European colonies. In order to account for endogeneity between institutions and economic outcomes, an instrumental variables technique was used based on work by Acemoglu and Johnson (2005) who were interested in measuring the effect of similar institutions on economic growth. The principal finding in this thesis suggests that stronger property rights are statistically significantly associated with higher levels of inequality in the sample. In contrast, contracting institutions do not seem to have a statistically significant effect on income distribution. |