Oligarchy, democracy, inequality and growth
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 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
inequality, economic development, political economy, redistribution, democratization
285-313
Bourguignon, François
070fd429-e2bd-4dfb-bd26-80e85c8cb1e0
Verdier, Thierry
87c483ea-f473-408f-9776-d0381cab6454
2000
Bourguignon, François
070fd429-e2bd-4dfb-bd26-80e85c8cb1e0
Verdier, Thierry
87c483ea-f473-408f-9776-d0381cab6454
Bourguignon, François and Verdier, Thierry
(2000)
Oligarchy, democracy, inequality and growth.
Journal of Development Economics, 62 (2), .
(doi:10.1016/S0304-3878(00)00086-9).
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
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Published date: 2000
Additional Information:
JEL classification codes: O11, O15, D72
Keywords:
inequality, economic development, political economy, redistribution, democratization
Identifiers
Local EPrints ID: 33483
URI: http://eprints.soton.ac.uk/id/eprint/33483
ISSN: 0304-3878
PURE UUID: 4cc7389c-eb62-48bd-8e10-ba4027d0e940
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Date deposited: 20 Jul 2006
Last modified: 15 Mar 2024 07:44
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Contributors
Author:
François Bourguignon
Author:
Thierry Verdier
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