What is the effect of the institutional qualities of state unions on the income distribution of member states? : A case study of the European Union

Abstract: This thesis deals with the effect of institutions of state unions on the participating state`s income distribution. The investigated institutional qualities are selected by the goals and values the member of the European Union agreed on. To determine the effect of the different institutional qualities on the income distribution a fixed-effect model is used. It includes the Gini coefficient as the dependent variable to measure income inequality, various institutions, and the dummy member EU as independent variables and several control variables. As expected, a few institutional qualities decrease income inequality although not all institutions support income equality. Possible explanations are given by the communist heritage of some countries or the influence of lobbyism. Still, strengthening the institutional quality is a reasonable instrument to fight the increasing inequality in the 21. Century.