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The Political Economy of Education and Development in an Open Economy

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  • François Bourguignon
  • Thierry Verdier

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 favor 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 DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2001-11.

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Date of creation: 2001
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Handle: RePEc:del:abcdef:2001-11

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Cited by:
  1. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 19(4), pages 55-121.
  2. Ramin Dadasov & Philipp Harms & Oliver Lorz, 2010. "Financial Integration in Autocracies: Greasing the Wheel or More to Steal?," MAGKS Papers on Economics 201014, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  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.
  4. Ruben Segura-Cayuela, 2006. "Inefficient Policies, Inefficient Institutions and Trade," 2006 Meeting Papers 502, Society for Economic Dynamics.
  5. Åsa Johansson & Yvan Guillemette & Fabrice Murtin & David Turner & Giuseppe Nicoletti & Christine de la Maisonneuve & Philip Bagnoli & Guillaume Bousquet & Francesca Spinelli, 2013. "Long-Term Growth Scenarios," OECD Economics Department Working Papers 1000, OECD Publishing.
  6. B.P. Zaaruka & J.W. Fedderke, 2011. "Indicators of Political and Economic Institutions in Tanzania: 1884 - 2008," Working Papers 231, Economic Research Southern Africa.

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