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The Political Economy of Education and Development in an Open Economy

Author

Listed:
  • François Bourguignon

    (Banque Mondiale - Banque Mondiale)

  • Thierry Verdier

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

If the price effect of opening up a developing economy may be expected to act as a disincentive for investment in human capital, the opposite is likely to be true of the income effect, especially in the presence of credit market imperfections among the poor. It is shown in this paper that this may no longer be the case in a society initially dominated by an oligarchic capitalist elite that is afraid of losing its political control in favor of an educated middle class. Although it may sometimes be in its interest to democratize by subsidizing education when the economy is closed, incentives to do so disappear when the economy is open to trade or factor flows.

Suggested Citation

  • François Bourguignon & Thierry Verdier, 2005. "The Political Economy of Education and Development in an Open Economy," Post-Print halshs-00754072, HAL.
    • Handle: RePEc:hal:journl:halshs-00754072
    DOI: 10.1111/j.1467-9396.2005.00522.x
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    References listed on IDEAS

    as
    1. François Bourguignon & Thierry Verdier, 2005. "The Political Economy of Education and Development in an Open Economy," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 529-548, August.
    2. Rodrik, Dani, 2000. "Trade Policy Reform as Institutional Reform," IDB Publications (Working Papers) 2189, Inter-American Development Bank.
    3. Donald J. Robbins, 1996. "Evidence on Trade and Wages in the Developing World," OECD Development Centre Working Papers 119, OECD Publishing.
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    Cited by:

    1. François Bourguignon & Thierry Verdier, 2005. "The Political Economy of Education and Development in an Open Economy," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 529-548, August.
    2. Ramin Dadasov & Philipp Harms & Oliver Lorz, 2013. "Financial integration in autocracies: Greasing the wheel or more to steal?," Economics of Governance, Springer, vol. 14(1), pages 1-22, February.
    3. Chakrabarty Debajyoti & Chanda Areendam & Ghate Chetan, 2006. "Education, Growth, and Redistribution in the Presence of Capital Flight," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(2), pages 1-41, November.
    4. Jin Chen & Don Hossler, 2017. "The Effects of Financial Aid on College Success of Two-Year Beginning Nontraditional Students," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(1), pages 40-76, February.
    5. Betty ASSE & Dalila CHENAF-NICET, 2021. "Note on the role of domestic and external demand on the process of premature deindustrialization," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 54, pages 145-160.
    6. Ruben Segura-Cayuela, 2006. "Inefficient Policies, Inefficient Institutions and Trade," 2006 Meeting Papers 502, Society for Economic Dynamics.
    7. Saad, Ayhab F., 2021. "Institutional change in the global economy: How trade reform can be detrimental to welfare," Economic Modelling, Elsevier, vol. 95(C), pages 97-110.
    8. Guimaraes, Bernardo & Sheedy, Kevin D., 2024. "Institutional specialization," Journal of International Economics, Elsevier, vol. 150(C).
    9. Dalila Chenaf-Nicet, 2020. "Dynamics of Structural Change in a Globalized World: What Is the Role Played by Institutions in the Case of Sub-Saharan African Countries?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 998-1037, September.
    10. Bernhard P. Zaaruka & Johannes W. Fedderke, 2011. "Indicators of Political and Economic Institutions in Tanzania: 1884 – 2008," Working Papers 231, Economic Research Southern Africa.
    11. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 13(4), pages 55-121.
    12. Åsa Johansson & Yvan Guillemette & Fabrice Murtin & David Turner & Giuseppe Nicoletti & Christine de la Maisonneuve & Philip Bagnoli & Guillaume Bousquet & Francesca Spinelli, 2013. "Long-Term Growth Scenarios," OECD Economics Department Working Papers 1000, OECD Publishing.

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    More about this item

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • F15 - International Economics - - Trade - - - Economic Integration
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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