Falkinger, Josef Grossmann, Volker 2005 This paper argues that an unequal distribution of political power, biased to landed elites and owners of natural resources, in combination with openness to trade is a major obstacle to development of natural resource- or land-abundant economies. We develop a two-sector general equilibrium model and show that in an oligarchic society public investments conducive to industrialization— schooling for example—are typically lower in an open than in a closed economy. Moreover, we find that, under openness to trade, development is faster in a democratic system. We also endogenize the trade regime and demonstrate that in a land-abundant economy the landed elite has an interest to support openness to trade. We present historical evidence for Southern economies in the Americas that is consistent with our theoretical results: Resistance of landed elites to mass education, comparative advantages in primary goods production in the 19th century globalization wave, and low primary school enrollment and literacy rates. application/pdf https://folia.unifr.ch/global/documents/323693 https://folia.unifr.ch/documents/323693/files/s10887-005-3534-4.pdf eng info:eu-repo/semantics/altIdentifier/doi/10.1007/s10887-005-3534-4 info:eu-repo/semantics/altIdentifier/issn/1381-4338 info:eu-repo/semantics/openAccess Rights reserved Journal of Economic Growth. - Springer Science and Business Media LLC. - 2005, vol. 10, p. 231-272 Economic development Institutions Political system Public education Trade info:eu-repo/classification/udc/33 Institutions and Development: The Interaction Between Trade Regime and Political System http://purl.org/coar/resource_type/c_6501