Land-Rich Economies, Education and Economic Development

38 Pages Posted: 12 Mar 2007

See all articles by Sebastian Galiani

Sebastian Galiani

University of Maryland - Department of Economics

Daniel Heymann

United Nations

Date Written: December 16, 2005


We analyze the emergence of large-scale education systems in a framework where growth is associated with changes in the configuration of the economy. We model the incentives that the economic elite could have (collectively) to accept taxation destined to finance the education of credit-constrained workers. Contrary to previous work, in our model this incentive does not necessarily arise from a complementarity between physical and human capital in manufacturing. Instead, we emphasize the demand for human-capital-intensive services by high-income groups. Our model seems capable to account for salient features of the development of Latin America in the 19th century, where, in particular, land-rich countries such as Argentina established an extensive public education system and developed a sophisticated service sector before starting significant manufacturing activities.

Keywords: Natural Resources, Institutions, Education and Economic Development

JEL Classification: O0, O1

Suggested Citation

Galiani, Sebastian and Heymann, Daniel, Land-Rich Economies, Education and Economic Development (December 16, 2005). Available at SSRN: or

Sebastian Galiani (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

Daniel Heymann

United Nations ( email )

New York, NY 10017
United States

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