Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/155769 
Year of Publication: 
2017
Series/Report no.: 
Hohenheim Discussion Papers in Business, Economics and Social Sciences No. 06-2017
Publisher: 
Universität Hohenheim, Fakultät Wirtschafts- und Sozialwissenschaften, Stuttgart
Abstract: 
In this paper, we consider whether or not inequality forces society to expend more resources on supervision which imposes an extra cost to doing business. Some argue that since inequality deteriorates social capital, there is a greater need for supervisory labor which is a costly burden to bear. We propose an alternative (but not mutually exclusive) explanation. We argue that the war on drugs leads to institutional decay and lower levels of trust which, in turn, force private actors to deploy resources to supervise workers and protect themselves. Our explanation complements the argument regarding the link between inequality and guard labor.
Subjects: 
Economic Growth
Inequality
Drugs
Guard Labor
JEL: 
N11
N21
E31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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