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The Political Economy of Social Inclusion

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  • Sylvain Dessy
  • Stéphane Pallage
  • Désiré Vencatachellum

Abstract

We build a political economy model of state policy choice highlighting the challenges to breaking barriers to the adoption of inclusive policies in Africa. We highlight necessary and sufficient conditions for a political leader to gain from implementing exclusive policies: (i) Implementing inclusive policies must be risky; (ii) the political leader must have adequate access to an overseas’ financial safe haven as a technology for protecting the spoils from implementing exclusive policies, or investing the looted funds in the domestic economy must sufficiently contribute to mitigate the risk of a revolution. Our results suggest that breaking barriers to inclusive policies in Africa is not an easy task. Bans on international money-laundering schemes may not be sufficient if domestic money laundering is easy and sufficiently discrete.

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Bibliographic Info

Paper provided by CIRPEE in its series Cahiers de recherche with number 1202.

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Date of creation: 2012
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Handle: RePEc:lvl:lacicr:1202

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Keywords: Inclusive policies; social exclusion; rebellion; financial safe havens; development;

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  1. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2007. "Emergence and Persistence of Inefficient States," Working Papers 0705, CREI Università degli Studi Roma Tre, revised 2007.
  2. Daron Acemoglu & James A. Robinson, 2000. "Why Did The West Extend The Franchise? Democracy, Inequality, And Growth In Historical Perspective," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1167-1199, November.
  3. Daron Acemoglu & James A. Robinson & Thierry Verdier, 2004. "Alfred Marshall Lecture: Kleptocracy and Divide-and-Rule: A Model of Personal Rule," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 162-192, 04/05.
  4. Pallage, Stephane & Robe, Michel A, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 641-72, November.
  5. Edward L. Glaeser, 2002. "The Political Economy of Hatred," NBER Working Papers 9171, National Bureau of Economic Research, Inc.
  6. Milante, Gary, 2007. "A kleptocrat's survival guide : autocratic longevity in the face of civil conflict," Policy Research Working Paper Series 4186, The World Bank.
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