Is financial openness bad for education? A political economy perspective on development

François Bourguignon; Thierry Verdier

doi:10.1016/S0014-2921(00)00049-0

Is financial openness bad for education? A political economy perspective on development

François Bourguignon, Thierry Verdier

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

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. It is shown that international financial liberalization, while stimulating physical capital accumulation, reduces the capitalist elite willingness to subsidize domestic human capital accumulation in the medium run. It thus delays, without necessarily impeding the process of democratization. (C) 2000 Elsevier Science B.V. All rights reserved.

Original language	English (US)
Pages (from-to)	891-903
Number of pages	13
Journal	European Economic Review
Volume	44
Issue number	4-6
DOIs	https://doi.org/10.1016/S0014-2921(00)00049-0
State	Published - May 2000

Keywords

Democratization
Education
Openness
Political economy

ASJC Scopus subject areas

Finance
Economics and Econometrics

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