Presentation 1 on Income Inequality.pptx

10. Introduction
• Institutions are the rules which shape the
political, economic and social structure. When
these rules are used for vested interest, it will
increase the uncertainty in society and
produce low quality of institutions.
• These low quality of institutions generate
the gap between the rich and the poor, high

11. • Exploring the relationship between Economic
Development and Institutional quality has been a
major area of interest. Institutions may increase
or decrease the economic development through
their quality.
• For stable economic growth, a country needs
high quality in its institutions. These institutions

12. • Kuncic (2014) divided the institutions into
three categories, i.e. legal, political and
economic.
• Political institutions are responsible for
making law, democratic accountability and
control the corruption.
• Economic institutions are responsible for
financial freedom, economic environment and
investment decision.
• While Legal institutions are responsible for

13. • Qualities of these institutions give the
opportunities of low-income groups to enhance
educational and health standard. High income
inequality prevent the investment in health and
education sector, so poor people would not be
politically active thus undermining the

14. • These developing countries have low levels of
economic and social development which tend to
have lower levels of health, education, political
rights, economic freedom, ethnic, judicial system
and higher level of corruption.
• For this reason, poor quality in institution may

15. 0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 2 2003 2 0 0 4 2005 2 0 0 6 2007 2008 2009 2010
INSTITUTIONAL
QUALITY
INDEX
YEARS
GRAPH NO.1
QUALITY OF LEGAL INSTITUTION IN WORLD
low develop middle develop high develop very high develop

16. 0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 9 9 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
INSTITUTIONAL
QUALITY
INDEX
YEARS
GRAPH NO. 2
QUALITY OF POLITICAL INSTITUTION IN WORLD
low develop middle develop high develop very high develop

17. 0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 9 9 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
INSTITUTIONAL
QUALITY
INDEX
YEARS
GRAPH NO. 3
QUALITY OF ECONOMIC INSTITUTION IN WORLD
middle develop high develop very high develop low develop

18. Research Question
• For that reason, one of the most promising
research lines in the last decade is that
which analyzes the determinants of the
institutional quality of countries, because
this quality has been found to be a
fundamental element for economic growth.
• The consensus achieved in the existing
research is still weak.
• This fact leads us to propose the following
hypothesis:
• the factors that determine institutional

19. • The above graphs show that there is
heterogeneity in institutional qualities in high
developed countries and rest of the world. So
there is also needs that the determinant of
institutional qualities in these countries analyzed
separately.
• This study will be unique in this way that it will

20. Objective of the Study
1. To investigate the Factors which determine
institutional qualities in all countries.
– To investigate the Factors which determine
Political institutional quality.
– To investigate the Factors which determine
Economic institutional quality
– To investigate the Factors which determine Legal