Democracy,property rights and economic growth

What does the global surge in democracy and capitalism portend for economic growth? The shift toward popular government is predicted by some to accelerate growth, by others to retard it. Often left out of the equation is property rights as a factor distinct from democratic rule. Using recent data on 59 less developed and transitional countries, this article explores the relationship among institutional factors and growth in the 1980s and early 1990s. Democratic freedoms and property rights are associated with the dependent variable, suggesting that national income in poor countries stands to gain from recent efforts to implant these institutions.     

Higher education and economic growth in Africa

This paper uses panel data over the 1960–2000 period, a modified neoclassical growth equation, and a dynamic panel estimator to investigate the effect of higher education human capital on economic growth in African countries. We find that all levels of education human capital, including higher education human capital, have positive and statistically significant effect on the growth rate of per capita income in African counties. Our result differs from those of earlier research that find no significant relationship between higher education human capital and income growth. We estimate the growth elasticity of higher education human capital to be about 0.09, an estimate that is twice as large as the growth impact of physical capital investment. While this is likely to be an overestimate of the growth impact of higher education, it is robust to different specifications and points to the need for African countries to effectively use higher education human capital in growth policies.     

Privatisation and economic growth in developing countries

This article re-examines the relation between privatisation and economic growth. Previous studies that have attempted to measure this relationship have concluded that privatisation has had a sizeable positive effect on economic growth. Our study uses data for 63 developing countries over the time period 1988–97. It uses the framework of an extreme-bounds analysis (EBA) to conduct a cross-country growth regression analysis. Our findings contradict earlier results, but reaffirm the view that effective competition and its regulation may need to accompany privatisation to make a positive impact on economic growth.     

Country size and economic growth and development

This paper attempts to provide limited empirical evidence on the nature of the relationship between country size and rates of economic growth and levels of economic development, and on the possible effects of trade concentration and dependence on trade on this relationship. It suggests that there is no discernible association between country size and economic development, nor between country size and economic growth, and that neither the dependence on trade of small countries nor their commodity and geographic export concentration are necessarily important factors in economic growth and economic development.     

Post-war Russian economic growth: not a riddle

In a recent article Steven Rosefielde (2003) has advanced three propositions. He suggests that according to the best available statistics the post-war growth of the Russian economy under the command system was surprisingly good; in fact, he argues that it was too good. The standard for this judgement is economic theory, which holds that non-market systems must fail by comparison with market economies; Rosefielde associates specifically this view with the ‘Washington consensus’. He concludes that it is the statistics that are at fault: they ‘lied and were misconstrued’ by Western ‘statistically oriented comparativists’ in a way that was unduly favourable to the command system. In this comment I argue that Rosefielde has misread both the facts and the theory. There is no riddle in the statistics. His conclusion, therefore, must fall.     

Patterns of energy consumption and economic growth and structure

The role of energy utilization in economic growth has received much attention in recent years. The distinctive characteristics of our analysis are that this role is dealt with in a quantitative way and that both cross‐section and time‐series approaches are utilized. We confirm earlier findings that energy consumption tends to be more responsive to economic growth in less developed than in advanced countries. We conclude, however, that the relationship between energy and economic growth activity is affected by a variety of other factors. Multivariate tests suggest that the industrial structure of the economy and the composition of energy consumption are especially significant additional variables.     

Financial development and economic growth: Additional evidence

This note suggests that, contrary to the conclusions reached in several recent studies, the empirical evidence does not support the view that financial development promotes economic growth. It is first noted that the predominant pattern in the data for 95 individual countries is that of a negligible or weakly negative covariation between financial development and growth of real GDP per capita. Second, the individual‐country correlational picture is a sharp contrast to the correlations based on crosscountry data that have been used in most research on the subject. Third, individual‐country estimates of a basic multiple‐regression growth model also do not indicate a positive association between financial development and growth. Fourth, in cross‐country data and models of the kind that have been used in most studies, when the regression structure is permitted to vary across three subgroups, a huge parametric heterogeneity is observed, and the overall indication is that of a negligible or negative association between financial development and growth.     

On the problem of identifying the engines of economic growth

This article investigates the empirical relationship between sectoral growth and income growth and in so doing casts doubt on previous studies which have argued that either export or agricultural growth enhances total income growth. It is shown that the evidence from the correlation and regression models used to date is inconclusive and that much of the measured impact of sectoral growth on overall income growth may be spurious in the sense that it can be explained by growth in the underlying inputs. Professor Rittenberg’s research interests include sources of economic growth, stabilization/liberalization policies, and Third World debt, with particular emphasis on the Turkish economy.     

Foreign direct investment,financial development and economic growth

This article argues that the development of the financial system of the recipient country is an important precondition for FDI to have a positive impact on economic growth. A more developed financial system positively contributes to the process of technological diffusion associated with FDI. The article empirically investigates the role the development of the financial system plays in enhancing the positive relationship between FDI and economic growth. The empirical investigation presented in the article strongly suggests that this is the case. Of the 67 countries in data set, 37 have a sufficiently developed financial system in order to let FDI contribute positively to economic growth. Most of these countries are in Latin America and Asia.     

Trade liberalisation,government expenditure and economic growth in Egypt

This article investigates the combined effects of growth in government expenditure, exports, investment and labour supply on economic growth in Egypt between 1955 and 1996. Using cointegration and error correction models, the article finds a long‐run relationship between the variables, but less evidence of one in the short run. To account for the important policy reforms in 1974 and 1991, dummy variables are added which show the reforms have significantly affected the relationship between government expenditure and growth in a positive direction, but have had a negative effect on exports and growth. This conclusion is further supported by the time‐varying coefficient analysis.     

Fiscal decentralisation and IDC economic growth: An empirical investigation

The impact of fiscal decentralisation on LDC economic growth and development is widely debated in the development literature. Notwithstanding this, there has been little attempt to test systematically this relationship. Accordingly, in this note we present an empirical examination of the relationship between the level of fiscal decentralisation and economic growth rates across a sample of twenty‐three LDCsfrom 1974 to 1991. We fail to find, however, any strong, systematic relationship between the two among our sample of LDCs.     

Capitalism,socialism and economic growth: A post-Keynesian pekspective

I thank Robert Dixon for many comments and suggestions and Michael W. Hughey for editorial remarks.     

Regime changes,economic policies and the effect of aid on growth

This study finds that on average aid has little impact on economic growth, although a robust finding is that aid promotes growth only in a politically stable environment irrespective of the quality of the country's economic policies. Aid is ineffective in an unstable environment even in the presence of good policies. The results, however, indicate that policy is more effective in promoting growth when supported by increased aid flows rather than aid being more effective in good policy environment. The empirical results also provide some tentative support for the presence of an aid Laffer curve in the politically stable countries. The allocation of aid is found to be influenced by the country size and its state of development, rather than the quality of policy.