TY - JOUR
T1 - Is financial openness bad for education? A political economy perspective on development
AU - Bourguignon, François
AU - Verdier, Thierry
PY - 2000/5
Y1 - 2000/5
N2 - 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.
AB - 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.
KW - Democratization
KW - Education
KW - Openness
KW - Political economy
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U2 - 10.1016/S0014-2921(00)00049-0
DO - 10.1016/S0014-2921(00)00049-0
M3 - Article
AN - SCOPUS:0034085433
VL - 44
SP - 891
EP - 903
JO - European Economic Review
JF - European Economic Review
SN - 0014-2921
IS - 4-6
ER -