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The Political Economy of Social Inclusion

Author

Listed:
  • Sylvain Dessy
  • Stéphane Pallage
  • Désiré Vencatachellum

Abstract

We build a political economy model of state policy choice highlighting the challenges to breaking barriers to the adoption of inclusive policies in Africa. We highlight necessary and sufficient conditions for a political leader to gain from implementing exclusive policies: (i) Implementing inclusive policies must be risky; (ii) the political leader must have adequate access to an overseas’ financial safe haven as a technology for protecting the spoils from implementing exclusive policies, or investing the looted funds in the domestic economy must sufficiently contribute to mitigate the risk of a revolution. Our results suggest that breaking barriers to inclusive policies in Africa is not an easy task. Bans on international money-laundering schemes may not be sufficient if domestic money laundering is easy and sufficiently discrete.

Suggested Citation

  • Sylvain Dessy & Stéphane Pallage & Désiré Vencatachellum, 2012. "The Political Economy of Social Inclusion," Cahiers de recherche 1202, CIRPEE.
    • Handle: RePEc:lvl:lacicr:1202
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Inclusive policies; social exclusion; rebellion; financial safe havens; development;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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