Globalization increasingly involves less-developed countries (LDCs), i.e., economies which usually suffer from severe imperfections in their financial systems. Taking these imperfections seriously, we analyze how credit frictions affect the distributive impact of trade liberalizations. We find...

We show that inequality triggers social unrest in rural India. We develop a theoretical framework where social unrest is rationally used by civilians to oppose (unfair) surplus sharing by the elite. We predict that the probability of observing social unrest in a village increases with the sum of...