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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.

Suggested Citation

  • François Bourguignon & Thierry Verdier, 2001. "The Political Economy of Education and Development in an Open Economy," DELTA Working Papers 2001-11, DELTA (Ecole normale supérieure).
  • Handle: RePEc:del:abcdef:2001-11
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    References listed on IDEAS

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    1. Dustmann, Christian & Kirchkamp, Oliver, 2002. "The optimal migration duration and activity choice after re-migration," Journal of Development Economics, Elsevier, vol. 67(2), pages 351-372, April.
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    Cited by:

    1. Jin Chen & Don Hossler, 2017. "The Effects of Financial Aid on College Success of Two-Year Beginning Nontraditional Students," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(1), pages 40-76, February.
    2. Ramin Dadasov & Philipp Harms & Oliver Lorz, 2013. "Financial integration in autocracies: Greasing the wheel or more to steal?," Economics of Governance, Springer, pages 1-22.
    3. Chakrabarty Debajyoti & Chanda Areendam & Ghate Chetan, 2006. "Education, Growth, and Redistribution in the Presence of Capital Flight," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(2), pages 1-41, November.
    4. B.P. Zaaruka & J.W. Fedderke, 2011. "Indicators of Political and Economic Institutions in Tanzania: 1884 - 2008," Working Papers 231, Economic Research Southern Africa.
    5. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, pages 55-121.
    6. 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.
    7. Ruben Segura-Cayuela, 2006. "Inefficient Policies, Inefficient Institutions and Trade," 2006 Meeting Papers 502, Society for Economic Dynamics.

    More about this item

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • F15 - International Economics - - Trade - - - Economic Integration
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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