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Elites, Education and Reforms

  • Mina Baliamoune


We analyze the interplay of political elites’ de facto power, democracy and education based on a theoretical framework inspired by the model in Acemoglu and Robinson (2006). We identify conditions under which the elite may overcompensate the loss of de jure power (as a result of political reform) by investing too much in de facto power so that the probability to have de facto power is higher under democracy than under non-democracy. The analysis also shows that depending on whether the income effect of education is strong or weak and whether citizens’ education has increasing or decreasing returns, the elite may or may not support education subsidy under democracy. We show that under certain assumptions the political elites may treat democracy and spending on citizens’ education as substitutes. We comment on the implications of the results for understanding why countries that started from comparable initial conditions may follow divergent development paths.

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Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 18-2009.

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Length: 27 pages
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:icr:wpicer:18-2009
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  18. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
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  20. Collier, Paul & Hoeffler, Anke, 2009. "Testing the neocon agenda: Democracy in resource-rich societies," European Economic Review, Elsevier, vol. 53(3), pages 293-308, April.
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