The Political Economy of Social Inclusion

CIRPEE Working Paper No. 12-02

28 Pages Posted: 26 Jan 2012

See all articles by Sylvain Dessy

Sylvain Dessy

Université Laval - Département d'Économique

Stephane Pallage

University of Quebec at Montreal - Department of Economics; Centre interuniversitaire sur le risque, les politiques économiques et l'emploi (CIRPÉE)

Désiré Vencatachellum

African Development Bank

Date Written: January 24, 2012

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

JEL Classification: D70, D74, H50

Suggested Citation

Dessy, Sylvain and Pallage, Stephane and Vencatachellum, Désiré, The Political Economy of Social Inclusion (January 24, 2012). CIRPEE Working Paper No. 12-02. Available at SSRN: https://ssrn.com/abstract=1991288 or http://dx.doi.org/10.2139/ssrn.1991288

Sylvain Dessy

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Stephane Pallage (Contact Author)

University of Quebec at Montreal - Department of Economics ( email )

P.O. Box 8888, Downtown Station
Montreal, Quebec H3C 3P8
Canada
514-987-3000 ext. 8730 (Phone)
514-987-8494 (Fax)

Centre interuniversitaire sur le risque, les politiques économiques et l'emploi (CIRPÉE)

Pavillon De Sève
Ste-Foy, Quebec G1K 7P4
Canada

Désiré Vencatachellum

African Development Bank ( email )

Rue Joseph Anoma
Abidjan, Ivory Coast 01 BP 1387
Ivory Coast (Cote D'ivoire)

HOME PAGE: http://www.afdb.org

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