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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18917| Title: | Institutions and development : the interaction between trade regime and political system |
| Keywords: | O10 N16 N10 F43 H50 ddc:330 economic development institutions political system public education trade Entwicklung Politik der offenen Tür Außenwirtschaftspolitik Politisches System Theorie Welt |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | This paper argues that openness to goods trade in combination with an unequal distribution of political power has been a major determinant of the comparatively slow development of resource- or land-abundant regions like South America and the Caribbean in the nineteenth century. We develop a two-sector general equilibrium model with a tax-financed public sector, and show that in a feudal society (dominated by landed elites) productivity-enhancing public investments like the provision of schooling 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 political equilibrium, a land-abundant and landowner-dominated economy supports openness to trade. Finally, we discuss empirical evidence which strongly supports our basic hypotheses. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18917 |
| Other Identifiers: | http://hdl.handle.net/10419/18917 ppn:470772239 |
| Appears in Collections: | EconStor |
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