Inequality and Institutions: What Theory, History, and (Some) Data Tell Us.

Many scholars argue that political institutions affect economic and social inequality, while others claim that inequality affects institutions. Following most historical literature, we suggest that exogenous changes in technology, trade, or demography alter the value of factor endowments and thus change both inequality and institutions. We support this assertion with a welfare-maximizing model of endogenous institutional choice, with a series of historical case studies, and with an empirical examination of the history of franchise extension in nineteenth- and twentieth-century Europe. [ABSTRACT FROM AUTHOR]