The State, Property Righs and the Role of the Middle Class: A Fresh Look at the Data

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An important observations at the heart of the interdisciplinary dialogue between modern Economics and Political Science states that institutions that protect property rights are key to economic growth and social prosperity (North, 1982, 1990; Levi, 1988; Sened 1997) This is useful but extremely abstract knowledge. Formal institutions, measured in so many ways, have not been directly linked to economic performance. The causal relationship between economic development and political institutions is also far from being clear. This paper re-examines a basic argument that is more than two millennia old: the wealth of nations is determined by the wealth, size and constitutional protections of the middle class (Aristotle, Politics). So the question becomes: why some middle classes are well off and others struggle to survive. To this last question we only suggest a tentative answer. But we do provide an elegant theoretical argument as to why the middle class is so central for economic development and some convincing empirical evidence to this effect. Thus, we propose a move away from the study of formal institutional structures and a focus on institutional conditions that protect the property rights and well being of the middle class.

Keywords: Property Rights, State, Middle Class, Economic Growth, Gini Coefficient
Stream: Research Methodologies, Quantitative and Qualitative Methods
Presentation Type: Paper Presentation in English
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Itai Sened

Professor and Director, Center for New Institutional Social Sciences, Washington University in St. Louis
St. Louis, Missouri, USA

I am a Professor of Political Science at Washington University in St. Louis. My main interests are comparative theory of institutions, game theory and mathematical modeling. I teach Undergraduate and Graduate level courses in the Political Science Department. I am also the Director of the Center for New Institutional Social Science, CNISS. I am the author or co-author of four books:# Explaining Social Institutions , [Eds.] with Jack Knight, Michigan University Press, 1995.# The Political Institution of Property Rights, Cambridge University Press, 1997.# Political Bargaining: Theory, Practice, and Process, with Gideon Doron, Sage Publications, 2001.# Multiparty Democracy: Parties, Elections and Legislative Politics in Parliamentary Systems, with Norman Schofield, Cambridge University Press, 2006. I am also the author or co-author of over thirty refereed journal articles some in the top disciplinary and interdisciplinary journals of Political Science and Economics.

Marshal Thompson

Assistant Professor, Political Science, Northeastern Illinois University
Chicago, Illinois, USA

A young Ph.D from Washington University in St. Louis specializing in comparative political economy in African and Sub- Saharan Developmental processes.

Robert Walker

Assistant Professor, Department of Political Sciences
The Center for Applied Statistical Methods, Washingotn University in St. Louis

St. Louis, Missouri, USA

A Young Ph.D from the University of Rochester specializes in advanced statistical methods and international political economy, markets, risk factors and trends in international trade and invetments

Ref: I08P0370