Effects of political rivalry on public educational investments and income inequality: evidence from empirical data
AbstractIn this paper we intend to empirically examine how different political institutions may define the long-term economic development, determined by educational investments and income inequality. With this objective, we assess the impact of political rivalry on four selected macroeconomic variables: public investments in education, individual learning choice, GDP per capita and income inequality, motivated by previous theoretical results. We first construct a composite political rivalry indicator and examine how it varies across different groups of countries. Then, using cross-sectional data, we perform a series of regressions for examining political rivalry effects on the selected variables. Our empirical findings indicate that in lower income countries there is indeed a significant negative impact of political rivalry, which increases with the decrease in the development level. The same is not confirmed for higher-income countries, which may suggest that the relationship between political rivalry and the examined variables may, in fact, be weaker in these countries, or that relevant mechanisms may differ with the level of development.
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Bibliographic InfoPaper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 1304.
Length: 38 pages
Date of creation: Feb 2013
Date of revision:
economic development; human capital accumulation; inequality; institutions; political rivalry; public education.;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H40 - Public Economics - - Publicly Provided Goods - - - General
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- P0 - Economic Systems - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
- NEP-PBE-2013-03-16 (Public Economics)
- NEP-POL-2013-03-16 (Positive Political Economics)
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