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...

This paper provides a simple theory to study how the allocation of public funds between primary and higher education affects human cap- ital accumulation. The allocation is endogenously determined through majority voting. Public funding for higher education is not supported when a majority is...

To understand mixed evidence provided by empirical studies for the relationship between the accumulation of public debt and economic growth, it is necessary to consider not only the crowd-out effect of public debt on economic growth but also the growth-enhancing crowd-in effect that cannot be...

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...