The Political Economy of Social Inclusion

Sylvain Dessy (sdes@ecn.ulaval.ca), Stephane Pallage and Désiré Vencatachellum

Cahiers de recherche from CIRPEE

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.

Keywords: Inclusive policies; social exclusion; rebellion; financial safe havens; development (search for similar items in EconPapers)
JEL-codes: D70 D74 H50 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cwa, nep-pke and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1202

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