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Is Financial Openness bad for Education? A Political Economy Perspective on Development

This paper presents a simple model of the links between education, democratization and economic development. In a context of imperfect capital markets, we investigate the incentives for a capitalist oligarchy to subsidize the education of poor workers and to initiate a political transition.

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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 1999-20.

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Length: 16 pages
Date of creation: 1999
Date of revision:
Publication status: Published in European Economic Review, vol. 44, no. 4-6, pp. 891-903.
Handle: RePEc:del:abcdef:1999-20
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  1. Bourguignon, F. & Verdier, T., 1997. "Oligarchy, Democracy, Inequality and Growth," DELTA Working Papers 97-10, DELTA (Ecole normale supérieure).
  2. Feenstra, Robert C, 1987. " Incentive Compatible Trade Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 89(3), pages 373-87.
  3. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Wiley Blackwell, vol. 60(4), pages 755-76, October.
  4. David Spector, 1999. "Is it Possible to Redistribute the Gains from Trade Using Income Taxation?," Working papers 99-13, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Lewis, Tracy R. & Feenstra, Robert & Ware, Roger, 1989. "Eliminating price supports : A political economy perspective," Journal of Public Economics, Elsevier, vol. 40(2), pages 159-185, November.
  6. Bruno Frey, 1971. "Why do high income people participate more in politics?," Public Choice, Springer, vol. 11(1), pages 101-105, September.
  7. Mo, Pak Hung, 2000. "Income Inequality and Economic Growth," Kyklos, Wiley Blackwell, vol. 53(3), pages 293-315.
  8. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
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