Oligarchy, democracy, inequality and growth

This paper analyses the dynamics of inequality, democratization and economic development in a political economy model of growth where education is both the engine of growth and a determinant of political participation. In a context with imperfect capital markets, we investigate the incentives for an...

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Published in:	Journal of development economics Vol. 62; no. 2; pp. 285 - 313
Main Authors:	Bourguignon, François, Verdier, Thierry
Format:	Journal Article
Language:	English
Published:	Amsterdam Elsevier B.V 01-08-2000 Elsevier North-Holland Pub. Co Elsevier Sequoia S.A
Series:	Journal of Development Economics
Subjects:	Democracy Democratization Development economics Economic development Economic growth Economic models Economic theory Education Income distribution Income redistribution Inequality Oligarchy Political behavior Political economy Political participation Redistribution Democratization O15 Redistribution Political economy Economic development O11 D72 Inequality
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Abstract	This paper analyses the dynamics of inequality, democratization and economic development in a political economy model of growth where education is both the engine of growth and a determinant of political participation. In a context with imperfect capital markets, we investigate the incentives for an educated oligarchy to subsidize the poor's education and to initiate a democratic transition. We characterize the equilibrium patterns of political institutions, income distribution and growth as a function of the initial income and inequalities. In particular, we identify circumstances under which the Elite promotes the endogenous emergence of a middle class for purely political economy reasons. A simple linear infinite horizon framework is then presented. In this setting, we discuss the importance of historical dependence for long-run social stratification and redistribution.
AbstractList	This paper analyses the dynamics of inequality, democratization and economic development in a political economy model of growth where education is both the engine of growth and a determinant of political participation. In a context with imperfect capital markets, we investigate the incentives for an educated oligarchy to subsidize the poor's education and to initiate a democratic transition. We characterize the equilibrium patterns of political institutions, income distribution and growth as a function of the initial income and inequalities. In particular, we identify circumstances under which the Elite promotes the endogenous emergence of a middle class for purely political economy reasons. A simple linear infinite horizon framework is then presented. In this setting, we discuss the importance of historical dependence for long-run social stratification and redistribution. This paper analyzes the dynamics of inequality, democratization and economic development in a political economy model of growth where education is both the engine of growth and a determinant of political participation. In a context with imperfect capital markets, the incentives for an educated oligarchy to subsidize the poor's education and to initiate a democratic transition are investigated. The equilibrium patterns of political institutions, income distribution and growth are characterized as a function of the initial income and inequalities. In particular, circumstances are identified under which the elite promotes the endogenous emergence of a middle-class for purely political economy reasons. A simple linear infinite horizon framework is then presented. In this setting, the importance of historical developments for long run social stratification and redistribution is discussed.
Author	Bourguignon, François Verdier, Thierry
Author_xml	– sequence: 1 givenname: François surname: Bourguignon fullname: Bourguignon, François – sequence: 2 givenname: Thierry surname: Verdier fullname: Verdier, Thierry
BackLink	http://econpapers.repec.org/article/eeedeveco/v_3a62_3ay_3a2000_3ai_3a2_3ap_3a285-313.htm$$DView record in RePEc
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Snippet	This paper analyses the dynamics of inequality, democratization and economic development in a political economy model of growth where education is both the... This paper analyzes the dynamics of inequality, democratization and economic development in a political economy model of growth where education is both the...
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SubjectTerms	Democracy Democratization Development economics Economic development Economic growth Economic models Economic theory Education Income distribution Income redistribution Inequality Oligarchy Political behavior Political economy Political participation Redistribution
Title	Oligarchy, democracy, inequality and growth
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