G. Saintpaul et T. Verdier, INEQUALITY, REDISTRIBUTION AND GROWTH - A CHALLENGE TO THE CONVENTIONAL POLITICAL-ECONOMY APPROACH, European economic review, 40(3-5), 1996, pp. 719-728
This paper reconsiders the conventional political economy view that: (
1) more unequal societies tend to make more redistribution and (2) mor
e redistribution is harmful to growth. We present a number of theoreti
cal arguments suggesting that the two previous implications are not ne
cessarily true and that the empirically observed negative correlation
between inequality and growth might just come from the fact that more
unequal societies tend to redistribute less which in turn is actually
detrimental to growth.