Assessing the distributional effects of regulation in developing countries

The paper examines the effect of regulation on income inequality for 72 developing countries over the 1970-2012 period using General Method of Moment estimation technique. The results show that regulation is positive and significantly related to income inequality. The results indicate that regulation has differential effects in developing countries, with the most detrimental effect in Latin America. After controlling for types of regulation, it emerges that labor and general business regulations have a positive effect, while credit market regulations have no effect on the distribution of income.