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Education, Rent Seeking and Growth

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  • Berdugo, Binyamin
  • Meir, Uri

Abstract

This paper studies the role of education as a way of reducing private rent seeking activities and increasing output. In many underdeveloped economies, for most individuals, there is no private return to education. Nonetheless, according to this paper, governments are better off by investing in public education. We view education as a means to build personal character, thereby affecting macroeconomic long run equilibrium by reducing the number of individuals who are engaged in private rentseeking activities. We show that education is more efficient than ordinary law enforcement because it has a long-run effect. The policy implication of this result is that even when education does not increase human capital, compulsory schooling will be beneficial in pulling underdeveloped economies out of poverty.

Suggested Citation

  • Berdugo, Binyamin & Meir, Uri, 2009. "Education, Rent Seeking and Growth," MPRA Paper 18369, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:18369
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    References listed on IDEAS

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    More about this item

    Keywords

    Rent Seeking; Decency; Education; Growth;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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