Oligarchy, democracy, inequality and growth

Bourguignon, François and Verdier, Thierry (2000) Oligarchy, democracy, inequality and growth Journal of Development Economics, 62, (2), pp. 285-313. (doi:10.1016/S0304-3878(00)00086-9).


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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

Item Type: Article
Digital Object Identifier (DOI): doi:10.1016/S0304-3878(00)00086-9
Additional Information: JEL classification codes: O11, O15, D72
ISSNs: 0304-3878 (print)
Keywords: inequality, economic development, political economy, redistribution, democratization
ePrint ID: 33483
Date :
Date Event
Date Deposited: 20 Jul 2006
Last Modified: 16 Apr 2017 22:15
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/33483

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