Two-sided Intergenerational Transfer Policy and Economic Development: A Politico-economic Approach

We consider an overlapping generations model with public education and social security where the overall size of these policies is determined in a repeated voting game. We investigate the interaction between the politically determined policies and economic development in a Markov perfect equilibrium. The following results are obtained. First, the level of human capital determines whether these policies are sustained in the Markov perfect equilibrium. Second, if the level of initial human capital is sufficiently high, human capital grows forever. In contrast, if the level of initial human capital is low, the economy might be caught in a poverty trap

Two-sided Intergenerational Transfer Policy and Economic Development: A Politico-economic Approach

We consider an overlapping generations model with public education and social security where the overall size of these policies is determined in a repeated voting game. We investigate the interaction between the politically determined policies and economic development in a Markov perfect equilibrium. The following results are obtained. First, the level of human capital determines whether these policies are sustained in the Markov perfect equilibrium. Second, if the level of initial human capital is sufficiently high, human capital grows forever. In contrast, if the level of initial human capital is low, the economy might be caught in a poverty trap

The Politics of Financial Development and Capital Accumulation

This paper proposes a model to examine conditions in which a government policy to improve imperfect credit markets is practiced through a democratic political process, and analyzes interactions between the politically implemented policy and economic development. The policy increases the welfare of middle-income individuals who can start new investments at the expense of poor and rich individuals. The preferences for the policy are thus non-monotonic over income levels. The realization of the policy strongly depends on the level of capital and the extent of income inequality. The low level of capital and high income inequality make the policy hard to implement, which is likely to cause the economy to fall into a poverty trap.Keywords: financial development, economic development, income inequality,majority voting

Inequality and Economic Development:The Role of Corruption

This paper presents a model where income inequality negatively affects economic growth through corruption by politicians. While politicians pursue corruption rents that reduce the provision of public goods and sacrifice citizen's welfare, they are also concerned about the political support of citizens to maintain their political power. When inequality among citizens is large, political support is less sensitive to corruption. Therefore, large inequality increases corruption and impedes economic growth. Since corruption is more prevalent in poor countries than rich ones, our argument is consistent with the evidence that shows a negative relationship between inequality and growth in poor countries.Corruption, Income Inequality, Economic Growth

A Politico-economic Approach on Public Debt in an Endogenous Growth Economy

We consider an overlapping generations closed economy in which a government finances the cost of public good provision by labor income taxation and/or public debt issuance. The size of these public policies is determined in a repeated probabilistic voting game. We investigate the characteristics of a Markov perfect politico-economic equilibrium in which the size of public policies depends on both the stock of public debt and the level of physical capital, and show that individuals' stronger preferences for public good provision tighten fiscal discipline and promote economic growth

Composition of Public Education Expenditures and Human Capital Accumulation

This paper provides a simple theory to study how the allocation of public funds between primary and higher education affects human capital accumulation. The allocation is endogenously determined through majority voting. Public funding for higher education is not supported when a majority is poor. In some cases, higher education starts to be realized as a majority of individuals accumulate enough human capital through primary education. Although the emergence of higher education can accelerate aggregate human capital accumulation, it widens income inequality because the very poor are excluded from higher education and the declined budget share for primary education decreases its quality

Composition of Public Education Expenditures and Human Capital Accumulation

This paper provides a simple theory to study how the allocation of public funds between primary and higher education affects human capital accumulation. The allocation is endogenously determined through majority voting. Public funding for higher education is not supported when a majority is poor. In some cases, higher education starts to be realized as a majority of individuals accumulate enough human capital through primary education. Although the emergence of higher education can accelerate aggregate human capital accumulation, it widens income inequality because the very poor are excluded from higher education and the declined budget share for primary education decreases its quality

Detection of HBs antigen in routine paraffin embedded liver tissue by enzyme-labelled antibody technique

HB surface antigen (HBs Ag) was detected using the enzyme-labelled antibody technique on routinely processed liver biopsy material fixed in Bouin's fixative and embedded in paraffin. Of 85 examined specimens, 45 cases were HBs Ag positive by both the immunofluorescent test and the enzyme labelled antibody technique. The remaining 40 cases were negative by both techniques. The specificity of HBs Ag detected by the enzyme-labelled antibody technique was confirmed by the blocking test using guinea pig specific HBs antibody. The results indicate that the enzyme-labelled antibody technique may be useful for detecting HBs Ag on routine paraffin sections.</p

The Politics of Financial Development and Capital Accumulation

This paper proposes a simple analytical model to examine conditions in which a government policy to improve imperfect credit markets is practiced through a democratic political process, and analyzes interactions between the politically implemented policy and economic development. Individuals who support the policy are those who can start new investments only after the implementation of it. High income inequality and the low level of capital make the policy hard to implement, which is likely to cause the economy to fall into a poverty trap

Inequality, extractive institutions, and growth in nondemocratic regimes

This study investigates the effect of inequality on economic growth in nondemocratic regimes. We provide a model in which a self-interested ruler chooses an institution that constrains his or her policy choice. The ruler must care about the support share of citizens in order to keep power. Under an extractive institution, the ruler can extract a large share of citizens' wealth, but faces a high probability of losing power because of low public support. We show that inequality affects the ruler's trade-off between the expropriation of citizens' wealth and his or her hold on power. Large inequality among citizens makes the support share for the ruler inelastic with respect to his or her choice of institution. Thus, the ruler chooses an extractive institution, which impedes investment and growth. These results provide an explanation for the negative relationship between inequality and growth and the negative relationship between inequality and the quality of institutions, both of which are observed in nondemocratic countries