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The voracity effect (Tornell and Lane, 1999) shows that in the presence of a weak legal framework, the competition among powerful groups over a common resource (tax revenues) has perverse effects on economic growth. We investigate the economic effects of assuming that groups have dierent bargaining power. The introduction of heterogeneity has important consequences. First, the perverse effect of voracity on growth becomes weaker and asymmetric, as heterogeneity reveals the presence of a new mechanism that we label as the switching effect. Secondly, with heterogeneity changes in the allocation of bargaining power across groups become a new source of voracity. Thirdly, shocks that trigger the voracity effect also have an impact on inequality. We find that the relationship between voracity, growth and inequality depends on the nature of the shock. We look for voracity among developed countries and find some suggestive evidence of its presence among OECD countries characterized by weak institutions.
