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The Political Economy of Education and Development in an Open Economy

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Author Info
Bourguignon, François
Verdier, Thierry

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Abstract

If the price effect of opening up a developing economy may be expected to act as a disincentive for investment in human capital, the opposite is likely to be true of the income effect, especially in the presence of credit market imperfections among the poor. It is shown in this Paper that this may not be the case anymore in a society initially dominated by an oligarchic capitalist elite that is afraid of losing its political control in favour of an educated middle class. Although it may sometimes be in its interest to democratize by subsidizing education when the economy is closed, incentives to do so disappear when the economy is open to trade or factor flows.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3075.

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Date of creation: Nov 2001
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Handle: RePEc:cpr:ceprdp:3075

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Related research
Keywords: education; globalization; political economy;

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Find related papers by JEL classification:
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
F15 - International Economics - - Trade - - - Economic Integration
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Theo S Eicher & Cecilia Garcia Penalosa, . "Inequality and Growth," Discussion Papers in Economics at the University of Washington 0083, Department of Economics at the University of Washington. [Downloadable!]
    Other versions:
  2. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-78, December. [Downloadable!] (restricted)
  3. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, Oxford University Press, vol. 11(1), pages 33-57, January.
  4. Bourguignon, F. & Verdier, T., 1997. "Oligarchy, Democracy, Inequality and Growth," DELTA Working Papers 97-10, DELTA (Ecole normale supérieure).
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Rubén Segura-Cayuela, 2006. "Inefficient policies, inefficient institutions and trade," Banco de España Working Papers 0633, Banco de España. [Downloadable!]
    Other versions:
  2. Areendam Chanda & Debajyoti Chakrabarty & Chetan Ghate, . "Education, Growth, and Redistribution in the Presence of Capital Flight," Departmental Working Papers 2006-10, Department of Economics, Louisiana State University. [Downloadable!]
  3. Debajyoti Chakrabarty, 2006. "Education, Growth, and Redistribution in the Presence of Capital Flight," Papers on Entrepreneurship, Growth and Public Policy 2006-21, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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