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Type | Journal Article |
Scope | Discipline-based scholarship |
Title | Institutions and development: the interaction between trade regime and political system |
Organization Unit | |
Authors |
|
Item Subtype | Original Work |
Refereed | Yes |
Status | Published in final form |
Language |
|
Journal Title | Journal of Economic Growth |
Publisher | Springer |
Geographical Reach | international |
ISSN | 1381-4338 |
Volume | 10 |
Number | 3 |
Page Range | 231 - 272 |
Date | 2005 |
Abstract Text | This paper argues that an unequal distribution of political power, biased to landed elites and owners of natural resources, in combination with openness to trade is a major obstacle to development of natural resource- or land-abundant economies. We develop a two-sector general equilibrium model and show that in an oligarchic society public investments conducive to industrialization - schooling for example - are typically lower in an open than in a closed economy. Moreover, we find that, under openness to trade, development is faster in a democratic system. We also endogenize the trade regime and demonstrate that in a land-abundant economy the landed elite has an interest to support openness to trade. We present historical evidence for Southern economies in the Americas that is consistent with our theoretical results: resistance of landed elites to mass education, comparative advantages in primary goods production in the 19th century globalization wave, and low primary school enrollment and literacy rates. |
Digital Object Identifier | 10.1007/s10887-005-3534-4 |
PDF File | Download from ZORA |
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Additional Information | The original publication is available at www.springerlink.com |