1 Political Economy of Development and Underdevelopment Daron Acemoglu Department of Economics Massachusetts Institute of Technology October 10, 2005
2 The State of the World Economy Vast differences in prosperity across countries today. Income per capita in sub-saharan Africa on average 1/20 th of U.S. income per capita In Mali, Democratic Republic of Congo (Zaire), and Ethiopia, 1/35 th of U.S. income per capita What explains the different economic outcomes? How could we understand development and underdevelopment?
3 This lecture; two parts. Plan of the lectures 1. Sources of prosperity: Institutions matter Institutions vs geography vs culture 2. How do institutions emerge? Four theories of institutions Future lectures: Understanding and modeling institutions. Lecture 2: How institutions affect the allocation of resources and are chosen for distributional consequences. Lecture 3: How institutions may be more efficient (or less distortionary) in the short run than in the long run Reversal of Fortune among countries. Lecture 4: How equilibrium institutions change or may be reformed. Democratization vs. Consolidation vs. Repression
4 Outline Part 1: Sources of Prosperity Proximate causes of prosperity Fundamental causes of prosperity: Institutions vs culture vs geography Natural experiments of history: European colonization South vs. North Korea Chinese experience
5 Proximate Causes of Prosperity Physical capital differences; poor countries don t save enough. Human capital differences; poor countries don t invest enough in education and skills. Technology differences; poor countries don t invest in R & D and technology adoption, and don t organize their production efficiently. Markets; markets don t function in poor countries. Question: Why don t poor countries save enough, invest enough, develop and use technologies and have functioning markets?
6 Potential Fundamental Causes of Prosperity Institutions; humanly-devised rules shaping incentives. Geography; exogenous differences of environment. Culture; differences in beliefs, attitudes and preferences.
7 Douglass North (1990, p.3): What Are Institutions? Institutions are the rules of the game in a society or, more formally, the humanly devised constraints that shape human interaction. Economic institutions (e.g., property rights) shape economic incentives, contracting possibilities, distribution Political institutions (e.g., form of government, constraints on politicians) shape political incentives and distribution of political power.
8 Institutions? Key Distinctions (1) Formal vs. Informal Institutions How rules are codified vs. how rules are applied e.g., Constitutions of U.S. and many Latin American countries are similar, but the practice of politics is different. Why? Because the distribution of political power is different
9 Institutions? Key Distinctions (2) De jure vs. de facto political power De jure political power: power allocated by political institutions e.g., power allocated to a party by an election De facto political power: determined by economic, military or extra-legal means e.g., power of rebel groups in a Civil War, or the threat of such groups in peace. de facto power typically relies on solving the collective action problem
10 Institutional Variation Big differences in economic and political institutions across countries. Enforcement of property rights. Legal systems. Corruption. Entry barriers. Democracy vs. dictatorship Constraints on politicians and political elites. Electoral rules in democracy.
11 Economic institutions and economic performance (1). Log GDP per capita, PPP, in ZAR SDN HTI MLI LUX USA SGP CHE HKG AUS BEL DNK CAN AUT JPN FRA NOR ITA ISL ARE SWEFIN GBRNLD KWT ISR NZL IRL QATBHR ESP PRT MLT GRC KOR BHS CHL OMN SAU CZE ARG URY VEN MEX CRI COL BWA GAB PAN ZAF MYS TTOTHA HUN BRA IRN TURPOL TUN ECU BGR PER DOM DZA ROM RUS GTM JORPRY JAM PHL SUR SYR MAR IDN SLV BOLGUY EGY CHN AGO HND ZWE LKA NIC CMR GIN COG SEN CIV PAKGHA VNM MNG GMB IND TGO KEN UGA MDG BFA BGD NGA ZMB NER YEM SLE ETH MOZ MWI TZA Avg. Protection Against Risk of Expropriation,
12 Economic institutions and economic performance (2). Log GDP per capita, PPP, in VEN ARG MEX COL PAN SVK THA BRA LBN TUR ECU BGR DOM HRV TUN RUS ROM PER KAZ JAM LTU LVA JOR IDN PHL MAR BOL EGY CHN UKR ARM ZWE LKA NGA TZA PAK GEO KEN UGA ZMB MDGBFA MLI MOZ GHA SEN VNM IND MWI KOR CZE URY ZAF MYS HUN POL BEL JPN ITA SVN CHL USA HKG FRA AUT NOR AUS DEU GBR ISR IRL ESP PRT SGPCHE CAN DNK NLD SWE FIN NZL Control of Corruption GRC
13 Political institutions and economic performance. Log GDP per capita, PPP, in SWZ SYR GIN SDN TGO DZA UGA NGA TCD ZAR BFA BDI RWA GHA SLE IDN JOR MAR EGY CHN GUY AGO ZWE CIV CMR MRT SEN LSO CAF KEN MWI ETH SGP MEX GAB TUN YEM TZA MOZ PER THA HND LKA NIC COG PAK COM ARG VEN BGD NPL NER MLI LUX USA CHE NOR DNK DEU CAN AUT JPN BEL SWE GBR AUS NLD ITA FIN ISL NZL ISR IRL ESP PRT GRC KOR CHL MUS URY COL BWA MYS HUN PAN ZAF CRI BRA TTO TUR ECU FJI JAM PHL BOL Constraint on Executive in 1990s ZMB GTM HTI PRY MDG FRA SLV GMB POL DOM BEN IND
14 But Institutions Are Endogenous Institutions could vary because underlying factors differ across countries. Geography, ecology, climate Culture Perhaps other factors? (affecting exogenous component of productivity or technology)
15 Geography Hypothesis: Montesquieu s Story Warm climate laziness poverty and despotism. The heat of the climate can be so excessive that the body there will be absolutely without strength. So, prostration will pass even to the spirit; no curiosity, no noble enterprise, no generous sentiment; inclinations will all be passive there; laziness there will be happiness. Moreover, lazy people tend to be governed by despots, while vigorous people could be governed by democracies.
16 Geography Hypothesis: Modern Versions (1) Jared Diamond: Guns, Germs and Steel. Importance of geographic and ecological differences in agricultural technology and availability of crops and animals. Particularly important are differences across continents. But much variation within continents.
17 Geography Hypothesis: Modern Versions (2) Jeff Sachs: Economies in tropical ecozones are nearly everywhere poor, while those in temperate ecozones are generally rich because Certain parts of the world are geographically favored. Geographical advantages might include access to key natural resources, access to the coastline and sea..., advantageous conditions for agriculture, advantageous conditions for health. Tropical agriculture faces several problems that lead to reduced productivity of perennial crops in general and of staple food crops in particular The burden of infectious disease is similarly higher in the tropics than in the temperate zones
18 Montesquieu s story?. Log GDP per capita, PPP, in SGP CHE HKG NOR QAT JPN AUT AUS FRA BEL DNK CAN DEU NLD FIN ISL ITA IRL GBR SWE ARE ISR GRC ESP NZL KOR BRB PRT BHSBHR KWT MLT ARG CZE SAU SVN HUN MUS CHL EST MYS SVK MEX URY TTO OMN LBY ZAF POL BLR FJI LTU LVA RUS GAB BRA CRI THAKNA BWA IRNTUN TUR COL VEN PAN DOM DZA BGRHRV ROMKAZ PER GUY LCA PRY GEO GRD PHL DMA SLV GTM NAM SWZ JAM EGY JOR MARCHN TKM UKR BLZ ECU IDNLKA SYR VCT BTN AZE NICHND BOL LSO ARM MDA PNG IRQ UZB ZWE IND YUG GHA VNM MRT PAK CMR CAF CIV SEN BGD BIH KEN TGO CPV HTI NPL GIN MMR UGA STP GMB SDN TJK COG LBR BEN BFATCDMOZ NGA DJI GNB MWINER YEM ZMBMLI RWA TZA COM AGO MDG AFG ZAR BDI ETH SLE SOM Latitude USA LUX
19 Empirical Pitfalls of Correlations and Ordinary Least Squares Estimates Montesquieu s story an example of omitted variable bias and identification problem in empirical work Other omitted factors, e.g., human nature, culture, geography, vary across countries and affect economic performance. These are also correlated with or may have a causal effect on institutions. Reverse causality: Income affects institutions Attenuation bias: Measures of institutions very coarse, poorly correspond to conceptual measures, creating errors in variables problem.
20 Empirical Pitfalls for Geography The same concerns apply to the correlation between geographic characteristics and income per capita. Correlation does not make causation.
21 Need for Exogenous Variation Exploit natural experiments of history, where some societies that are otherwise similar were affected by historical processes leading to institutional divergence. Identify instruments for institutions; that is, a source of variation that affects institutions, but has no direct effect or an effect working through omitted variables, on income. Examples of potential natural experiments of history: 1. European colonization 2. South vs. North Korea 3. Chinese experience
22 European Colonization as a Natural Experiment Why a natural experiment? Because many factors, including geography, ecology and climate, are held constant, while Europeans set up different institutions in different parts of the globe. Potential Instrument suggested by this historical episode: settler mortality.
23 Settler Mortality As an Instrument: The Argument Settler mortality affects settlement decisions of colonizers. With high settler mortality, colonizer chooses extractive institutions, which are bad for long-run growth. With low settler mortality, colonizer more likely to settle and choose developmental institutions. Colonial institutions have a tendency to persist. Settler mortality has no direct effect on current performance, except its desired effect through institutional development. Identification assumption: check by controlling for various channels of influence and falsification exercises. Mechanism: (potential) settler mortality settlements early instit s current instit s current performance
24 Settler mortality and current institutions. 10 NZL USA CAN AUS SGP Avg. Protect. Against Risk Expropriation 8 6 HKG MYS ZAF PAK GUY SUR IND CHL BRA MEXBHS TTO COL MAR VEN URY PRY CRI EGY TUN ECU DZA ARG LKA PER BOL HND GTM BGD SLV IDN JAM VNM DOM KEN PAN SEN NIC GAB TZA CMR AGO COG UGA BFA TGO CIV GIN GHA SLE NER MDG GMB NGA 4 SDN HTI ZAR MLI Log Settler Mortality
25 The first stage First Stage Regressions: Dependent variable is protection against risk of expropriation All former colonies All former colonies All former colonies Without neo- Europes Settler Mortality (0.13) (0.15) (0.19) (0.14) Latitude 2.34 (1.37) Continent Dummies (p-value) [0.25] R-Squared Number of Observations Standard errors in parentheses Sample limited to countries for which have GDP per capita data
26 The reduced form: settler mortality and income per capita today. 10 AUS NZL USA SGP HKG CAN Log GDP per capita, PPP, in ZAF MYS CHL BHS ARG URY VEN MEX COL CRI BRATTO TUN ECU PER DZA GTM PRY SUR MAR GUY EGY BOL SLV LKA HND PAK IND SDN BGD PAN DOM JAM IDN NIC SEN VNM HTI KEN GAB AGO CMR COG UGA ZARBFA GIN CIV GHA TGO MDG NER GMB NGA MLI Log Settler Mortality TZA SLE
27 The causal effect of institutions: basic 2SLS estimates Second Stage Regressions: Dependent variable is log GDP per capita in 1995 All former colonies All former colonies All former colonies Without neo- Europes Protection Against Risk of Expropriation, (0.17) (0.26) (0.39) (0.45) Latitude (1.57) Continent Dummies (p-value) [0.09] Number of Observations
28 The causal effect of institutions: robustness Second Stage Regressions: all former colonies Dependent variable is log GDP per capita in 1995 Instrument is: Log Settler Mortality Log Settler Mortality Log Settler Mortality Log Settler Mortality Yellow Fever Protection Against Risk of Expropriation, (0.27) (0.17) (0.32) (0.84) (0.22) Temperature (p-value) [0.71] Humidity (p-value) [0.64] Malaria (0.59) Life Expectancy (0.07) Number of Observations
29 The Role of Culture (1): The Colonial Experiment What is culture? A relatively fixed characteristic of a group or nation affecting beliefs and preferences; e.g. religion. Does culture matter in the colonial experiment? Popular view going back to Adam Smith and Winston Churchill that British cultural and political influence was beneficial, it least relative to the French or the Spanish. Answer: it does not. The identity of the colonizer is insignificant.
30 Revisiting the British effect Dependent variable is log GDP per capita in 1995 Former Colonies Former Colonies Second Stage Protection Against Expropriation (0.23) (0.22) British Colony Dummy (0.39) English Legal Origin Dummy (0.37) First Stage Log Settler Mortality (0.14) (0.13) British Colony Dummy 0.67 (0.35) English Legal Origin Dummy 0.70 (0.34) R-Squared in First Stage Number of Observations 63 63
31 The Role of Culture (2): The Korean Experiment Korea: economically, culturally and ethnically homogeneous at the end of WWII. If anything, the North more industrialized. Exogenous separation of North and South, with radically different political and economic institutions. ie separation not related to economic, cultural or geographic conditions in North and South Big differences in economic and political institutions Communism (planned economy) in the North Capitalism, albeit with government intervention and early on without democracy, in the South Huge differences in economic outcomes.
32 North and South Korea GDP per capita South Korea North Korea
33 The Role of Culture (3): The Chinese Experience China, Hong Kong, Singapore, Taiwan have many cultural and ethnic similarities While China adopted state planning and communist political institutions, Hong Kong, Singapore and Taiwan followed a capitalist path with relatively well-enforced property rights. While China stagnated, Hong Kong, Singapore and Taiwan prospered. After Mao s death and 1978 reforms, especially the introduction of some basic property rights, changes in economic incentives in China, and now very rapid growth rate.
34 Role of culture (4) GDP per capita in China, Taiwan, and Hong Kong, ,000 20,000 15,000 10,000 5, China Taiwan Hong Kong Singapore
35 Part 2: Towards a Theory of Institutions. Outline Different meta-theories: efficiency, history, ideology and social conflict. Historical examples support the social conflict theory: 1. Land relations in the Dutch East Indies 2. Early financial development in the U.S. and Mexico 3. Price regulation in Ghana, Kenya and Colombia Anticipating future lectures: on inefficient institutions How they are chosen for distributional consequences How they may be efficient in the short run but not in the long run How they may be changed as a result of political struggles
36 Four Meta-Theories of Institutions 1. Efficiency: institutions adopted if socially efficient (e.g. promote aggregate growth). 2. Ideology: institutions adopted depending on beliefs by elite or citizens as to what is socially efficient. 3. History: institutions determined by historical accidents or unusual events, and are unchanging except for random events and future accidents. 4. Social conflict: institutions chosen for their distributional consequences by groups with political power.
37 Which Approach? (1) Efficient institutions view: not a useful framework Although, everything else equal, there would be a tendency to adopt efficient institutions... everything else is far from equal in practice Every set of institutions creates different losers and beneficiaries. Efficient institutions require either the losers to be compensated or the beneficiaries to impose their choice. But in practice, losers generally not compensated ex post, and often can be powerful enough to block institutional change that is beneficial in the aggregate. Empirically, efficient institutions view cannot help us understand why some societies adopt institutions that were disastrous for economic growth.
38 Which Approach? (2) Ideology view: not a useful framework by itself either Clearly, beliefs across societies differ, and existing regimes remain in place by gaining some degree of approval. Propaganda and media extremely important for regime survival. But many empirical patterns cannot be explained by ideology alone. In the Korean case, the original divergence in institutions partly related to ideology, but continuation of communist system partly because it is good for those with political power. The same British groups opted for different structures in different colonies: e.g., the Puritan colonies in Massachusetts Bay and Providence Island, the U.S. vs. Caribbean.
39 Which Approach? (3) History: ample evidence that institutional choices persist. This persistence was exploited in the construction of the instrumental variable approach above. But they are also choices, not simply dictated by history. Need to understand why institutions persist, and why, and how, they change Examples: While the communist system persisted in North Korea, it collapsed in Eastern Europe and Russia. Persistence in China until 1978 and change thereafter. Very different institutions in North and South America during the early colonial era and after independence.
40 Which Approach? (4) Institutions and social conflict: (Economic) institutions shape incentives and determine the allocation of resources Each set of institutions creates beneficiaries and losers; certain groups obtain high incomes, rents and privileges. Thus distributional implications from institutional choices. Preferences over institutions determined (at least partly) by their distributional implications. e.g., a monopolist would be opposed to a reduction in entry barriers even if these increase aggregate income.
41 Social Conflict and Institutions The social conflict approach empirically more promising: We can explain inefficient choices, even when their consequences are understood by the key actors. Also we can investigate when institutions will be more or less efficient, that is, comparative statics exercises.
42 Land Relations in Dutch Indies (1) Dutch East India Company (V.O.C.) monopolizing the production of valuable spices (nutmeg, cloves and mace) in the Moluccas, in particular in Ambon and Banda islands. Different indigenous organization between the islands. van Zanden (1993): [in Ambon] The Company... took over the existing feudal structure of raising tribute, monopolizing supply (excluding the British and Portuguese). They also used this feudal structure to increase the output of cloves.
43 Land Relations in Dutch Indies (2) In Banda, in contrast, there were many small autonomous city states, but There was no hierarchial social and political structure that could impose the will of the V.O.C...., especially stopping locals from selling nutmeg to the British and Portuguese. The V.O.C. decided to change the economic institutions on Banda, via a radical solution: Through military action, the V.O.C. kiled most of the population in and completely reorganized the production of nutmeg and established a slavery system, with the slaves supplied by the V.O.C. and its former employees as planters.
44 Financial Institutions in Mexico and the U.S. (1) Big differences in the structure of banking between the U.S. and Mexico in the 19 th century, during the critical period of divergence. Haber(2001) Mexico had a series of segmented monopolies that were awarded to a group of insiders. The outcome, circa 1910, could not have been more different: the U.S. had roughly 25, 000 banks and a highly competitive market; Mexico had 42 banks, two of which controlled 60 percent of total banking assets, and virtually none of which actually competed with another bank. Adverse consequences for Mexican industry. Lending by monopoly banks to inefficient firms of friends and associates, and of the politically powerful.
45 Financial Institutions in Mexico and the U.S. (2) Why? Because of the power of insiders and state governments in Mexico, supported by the dictatorship of Porfirio Diaz. In 1789, the U.S. also similar. Haber: [in the U.S. in late 18 th century]... it was not in the interest of state governments to charter large number of banks and create a competitive market for banking services Many U.S. politicians, including Alexander Hamilton, wanted to create monopolies. But expanding frontier, which caused interstate competition, and universal male suffrage made this system unsustainable. Insiders did not have enough political power to impose their preferred (potentially inefficient) institutions.
46 Price Regulation(1) Another form of economic institution: marketing boards regulating agricultural prices. Originally, introduced to prevent large fluctuations in farm revenues Bates (1981): very different form of price regulation in LDC agricultural markets. Ghana and Zambia: low prices paid to farmers through marketing boards, surplus transferred to politicians or urban groups. Kenya and Colombia: much more pro-farmer policies and institutions.
47 Price Regulation(2) Why? In Ghana and Zambia, but not in Kenya and Colombia, farmers had little political power. In Ghana, cocoa farmers small and unorganized, and also from different ethnic group than the ruling party, while urban groups politically more powerful. In Kenya, large farmers with greater political power. In Colombia, farmers with greater power through more democratic and competitive politics. Interestingly, during the military regimes of the 50s when democratic politics suspended, pricing was set to extract surplus from farmers.
48 Summary of the Three Cases Institutions not dictated purely by history, but chosen by society. Moreover, they are chosen, not mainly for efficiency nor because of differences in beliefs, but for their distributional consequences. Social conflict and political power important. In all cases, economic institutions chosen for their consequence, and particularly the rents created for the politically powerful groups. In almost all cases, the resulting economic institutions harmful for certain groups, and in many cases harmful for society at large.
49 Key lesson: Further Lessons from the Examples political power economic institutions Kenya vs. Ghana suggests a link between economic institutions and political power; Kenyan farmers that were larger and wealthier had political power, while small farmers in Ghana did not. economic institutions political power Mexico vs. U.S. and Colombia vs. Ghana show the influence of political institutions on political power political institutions political power And we will in later lectures: political power political institutions.
50 Towards a Theory of Institutions: Comparative Statics When do we expect a society to adopt good institutions? 1. When those holding political power also will benefit from well-enforced property rights (and financial development, free entry, functioning markets, etc.) 2. When there are relatively few resources to be extracted or exploited using political power. 3. When constraints on political power preclude expropriation or the imposition of institutions detrimental to excluded groups. 4. When the scope for manipulation of factor prices is relatively small.
51 Comparative Statics at Work Can we use these comparative statics to understand the colonial experience? Colonial powers chose better institutions when they themselves would benefit from well-enforced property rights, because they were the main inhabitants of the land. Moreover, as we will see later lectures, they also tended to opt for better institutions when there was less to extract, especially less labor to exploit. In low-settler-mortality places they developed democratic institutions and these institutions placed further checks on the development of bad policies in the future. Other applications in later lectures.
52 Towards a Theory of Institutions (2) Institutions may be relatively more efficient (or less distortionary) in the short run than in the long run; issues of appropriate institutions. Oligarchic structures, where the rich dominate politics, may generate growth in the short run if it protects the property rights of the most efficient entrepreneurs. However, it may generate potential expropriation and barriers to entry, threatening future productive entrepreneurs. This is consistent with the Rise and Fall of Oligarchic societies such as Venice and the Dutch Republic.
53 Towards a Theory of Institutions (3) Institutions may be changed as a result of political struggles. Recall de facto vs. de jure political power. The former is transitory while the latter is persistent. When a group out of power solves the collective action problem and gains de facto political power, it may require a change in de jure political power. This will help us understand the emergence and consolidation of democracy.
54 Institutions matter Conclusions (1) Although ideology and history influence institutions, in many cases institutions emerge because of their distributional consequences. Although everything else equal more efficient institutions more likely to arise, there will typically be major social conflicts over institutions. Then the choices benefiting politically powerful groups, not the society as a whole, more likely to emerge.
55 Conclusions (2) Summary: towards a dynamic theory De jure power (Political institutions) t De facto power t political power t Economic institutions t Economic policies t Political institutions t+1
ECON 184 Economic Growth: the role of institutions ECON 184: Institutions and Growth January 26, 2010 1 Contents 1 Institutions and growth: initial analysis 3 2 How can institutions affect economic growth?
Lecture 21: Institutions II Dave Donaldson and Esther Duflo 14.73 Challenges of World Poverty Institutions II: Plan for the lecture Discussion of assigned reading (Acemoglu, Johnson and Robinson) Causes
Lecture 9: Institutions, Geography and Culture Based on Acemoglu s L. Robbins lectures 1 The Wealth of Nations Vast differences in prosperity across countries today. Income per capita in sub-saharan Africa
AREC 345: Global Poverty and Economic Development Lecture 4 Professor: Pamela Jakiela Department of Agricultural and Resource Economics University of Maryland, College Park Does Absolute Latitude Explain
SESSION 1 Addressing institutional issues in the Poverty Reduction Strategy Paper process Scoping notes, detailed diagnostics, and participatory processes Public Sector Reform and Capacity Building Unit
1 Political Economy of Growth Daron Acemoglu Department of Economics, MIT Milan, DEFAP June 11, 2007 The Wealth of Nations Vast differences in prosperity across countries today. Income per capita in sub-saharan
China: How to maintain balanced growth? Ricardo Hausmann Kennedy School of Government Harvard University China s growth process An unprecedented miracle China has been the fastest growing country in the
Figure 1.1 The Parade of World Income Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-1 Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-2 Growth and Development: The Questions
Wilfrid Laurier University January 31st, 2013 Recap of the technology models Do the models match historical data? growth accounting Estimating technology change through history A revised model of technology
Opportunity Value Median = -0.06 FACTSHEET Knowledge Economy Assessment of Tunisia - Identifying and addressing capability and innovation gaps in the Southern and Eastern Mediterranean region (SEMED) Overriding
High level outline Today s tips for the Country Buy Report Stephen Malpezzi Introduction Overview of the country and economy Basic indicators (GDP, employment, etc.) Key institutions, the setting How does
Bringing Up Incentives: A Look at the Determinants of Poverty Alice Sheehan Outline presentation What s going on out there? Growth, Human Development indicators, Poverty rates, etc. A look at determinants
THE QUALITY OF GOVERNMENT CA FOSCARI INTERNATIONAL LECTURE Andrei Shleifer December 12, 2012 1 Richer countries almost always have better governments Less corrupt More efficient Quality of government improves
Deep Roots of Comparative Development Oded Galor AEA Continuing Education Program Lecture III - AEA 2014 Oded Galor Roots of Comparative Development Lecture III - AEA 2014 1 / 41 Deep Roots of Comparative
Economic Complexity and the Wealth of Nations Cesar A. Hidalgo ABC Career Development Professor MIT Media Lab Faculty Associate, Center for International Development Harvard University EARTH WIND WATER
Addressing The Marketing Problem of the Social Prepared for: KAS-Conference on 60 Years of Social Market Economy Sankt Augustin, November 30, 2009 Marcus Marktanner, American University of Beirut Outline
Lecture 12 The Solow Model and Convergence Noah Williams University of Wisconsin - Madison Economics 312 Spring 2010 Recall: Balanced Growth Path All per-capita variables grow at rate g. All level variables
Rethinking the Wealth of Nations Daron Acemoglu, MIT FEEM Lecture, December 14, 2009. 1 The Failure of Nations Vast differences in prosperity across countries today. Income per capita in sub-saharan Africa
Infrastructure and Economic Growth thin Egypt Norman V. Loayza, World ldbank Rei Odawara, World Bank Motivation Questions How does Egypt compare internationally regarding public infrastructure? Is Egypt
Estimating Global Migration Flow Tables Using Place of Birth Data Guy J. Abel Wittgenstein Centre (IIASA, VID/ÖAW, WU) Vienna Institute of Demography/Austrian Academy of Sciences 1 Introduction International
Accounting For Cross-Country Income Di erences January 2011 () Aggregation January 2011 1 / 10 Standard Primal Growth Accounting Aggregate production possibilities frontier: where Change in output is )
GDP per capita growth 03/11/2014 Financial services and economic development Thorsten Beck Finance why do we care? 0.04 BWA 0.02 0.00-0.02 COG SLE ALB GAB IND KOR TUR SGP MUS SDN MOZ IRLLUX IDN MAR EGY
Human Resources for Health Why we need to act now Progress towards the MDGs, particularly in Africa is slow, or even stagnating. Poor people cannot access basic services for want of doctors, nurses and
Governance, Rule of Law and Transparency Matters: BRICs in Global Perspective Daniel Kaufmann * Senior Fellow, Brookings Institution http://www.brookings.edu/experts/kaufmannd.aspx Panel on Transparency
Trade Policy Restrictiveness in Transportation Services Ingo Borchert, Batshur Gootiiz and Aaditya Mattoo Development Research Group Trade and International Integration, The World Bank OECD Expert Meeting
Macroeconomics II Growth Growth Possibilities We previously referred to the aggregate production function Y = A K α L 1- α. The growth rate of real GDP, Y, is generated by the contributions of A, K and
Density of countries Economic Growth: The Neo-classical & Endogenous Story EC307 ECONOMIC DEVELOPMENT 1960 Dr. Kumar Aniet University of Cambridge & LSE Summer School Lecture 4 1980 2000 created on July
ECON 260 Theories of Economic Development. Instructor: Jorge Agüero. Fall 2008. Lecture 1 September 29, 2008 1 General information Time and location: TR 2:10-3:30 p.m. SPR 3123 Office hours: T 10am-11am,
DEPENDENT ELITES IN POST- SOCIALISM: ARE LAND-BASED POST- COLONIAL SYSTEMS SO DIFFERENT FROM THE TRANSCONTINENTAL ONES? by Pal TAMAS [Institute of Sociology, HAS Budapest] STRUCTURE OF THE PAPER 1. STATE
Causes of Cross-country Income Gaps Prof. Lutz Hendricks Econ520 January 14, 2016 1 / 24 Objectives We start looking into the question: Why are some countries rich and others poor? We think about methods
Infrastructure investment and growth Luis Servén The World Bank IMF, November 2010 Background How important is infrastructure for economic growth? Old question even in Adam Smith s Wealth of Nations Empirically
ECONOMIC DIVERSIFICATION: BUILDING RESILIENCE TO CLIMATE CHANGE Sarwat Jahan Bonn September 7 th, 2015 The team also comprises Chris Papageorgiou (lead), Giang Ho, Ke Wang, Lisa Kolovich, Camelia Minoiu,
Institute for Development Policy and Management (IDPM) Development Economics and Public Policy Working Paper Series WP No. 33/212 Published by: Development Economics and Public Policy Cluster, Institute
Institutional Change and Growth-Enabling Governance Capabilities Nicolas Meisel Strategy and Research Dept - French Development Agency (AFD) Jacques Ould Aoudia Treasury and Economic Policy Directorate
Finance, Growth & Opportunity Implications for policy Today, I will make three points 1) Finance matters for human welfare beyond crises. 2) Financial innovation is associated with arguably necessary for
Subjective Well-Being, Income, Economic Development and Growth Dan Sacks, Betsey Stevenson and Justin Wolfers Wharton School, University of Pennsylvania and NBER Annual Bank Conference on Development Economics--Stockholm,
Global Spatial Analysis at the Grid Cell Level Mesbah Motamed Raymond Florax Will Masters Department of Agricultural Economics Purdue University March 2009 Urbanization at the grid cell level Growth regimes
Does Export Concentration Cause Volatility? Christian Busch 14. Januar 2010 Overview Countries with undiversified export structure are plausibly more vulnerable to external shocks. But difficult to evaluate
2006/SOM1/ACT/WKSP/007a Recasting Governance for the XXI Century - Presentation Submitted by: Miguel Schloss, Managing Partner DamConsult Ltd. APEC Workshop on Anti-Corruption Measures for the Development
Human Rights and Governance: The Empirical Challenge Daniel Kaufmann World Bank Institute www.worldbank.org/wbi/governance/ Presentation at Human Rights and Development: Towards Mutual Reinforcement Conference,
Subjective Well Being, Income, Economic Development and Growth Dan Sacks, Betsey Stevenson and Justin Wolfers Wharton School, University of Pennsylvania and NBER CSLS ICP Conference on Happiness December
Public Disclosure Authorized Policy Research Working Paper 5177 WPS5177 Public Disclosure Authorized Public Disclosure Authorized Infrastructure and Economic Growth in Egypt Norman V. Loayza Rei Odawara
MMSD & IIED Managing Mineral Wealth NGO PERSPECTIVE: FROM WORDS TO DEEDS Miguel Schloss Executive Director Transparency International Issues Policy distortions Institutional incentives Governance Implications
Evaluation with stylized facts AMPERE Subgroup on IAM Validation Valeria Jana Schwanitz Potsdam Institute for Climate Impact Research 27. Mai 2013 Content Fundamental laws and stylized facts Systematic
The Effects of Infrastructure Development on Growth and Income Distribution César Calderón Luis Servén (Central Bank of Chile) (The World Bank) ALIDE - The World Bank - Banco BICE Reunión Latinoamericana
Life-cycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants David Lagakos, UCSD and NBER Benjamin Moll, Princeton and NBER Tommaso Porzio, Yale Nancy Qian, Yale and NBER Todd Schoellman,
Relative Prices and Sectoral Productivity Margarida Duarte University of Toronto Diego Restuccia University of Toronto August 2012 Abstract The relative price of services rises with development. A standard
Income Differences Across Countries Pete Klenow Stanford University Society for Economic Dynamics July 6th, 2006 Vancouver, Canada 1 2000 PPP Income per capita 90 th /10 th 25.6 75 th /25 th 8.8 S.D. of
TOWARDS A RETURN OF INDUSTRIAL POLICY? ARTNeT SYMPOSIUM 25-26 JULY 211 ESCAP, BANGKOK Diversification versus Polarization: Role of industrial policy in Asia and the Pacific Sudip Ranjan Basu* International
Incen%ves The Good, the Bad and the Ugly Vale Columbia Center Interna%onal Investment Conference New York, Nov 13-14, 2013 Sebas%an James The World Bank Group 1 Prevalence of Tax Incen%ves around the Number
WPS4888 Policy Research Working Paper 4888 Informality in Latin America and the Caribbean Norman V. Loayza Luis Servén Naotaka Sugawara The World Bank Development Research Group Macroeconomics and Growth
Fertility Convergence Tiloka De-Silva a Silvana Tenreyro a,b a London School of Economics, CfM; b CEP, CEPR July 2015 Abstract A vast literature has sought to explain large cross-country differences in
1 The Role of Trade in Structural Transformation Marc Teignier UNIVERSIDAD DE ALICANTE European Summer Symposium in International Macroeconomics 23 May 2012, Tarragona Question Contributions Road Map Motivation
The Macroeconomic Implications of Financial Globalization Eswar Prasad, IMF Research Department November 10, 2006 The views expressed in this paper are those of the author(s) ) only, and the presence of
Trends in global income inequality and their political implications LIS Center; Graduate School City University of New York Talk at the Stockholm School of Economics, September 1, 2014 A. National inequalities
The distribution of household financial contributions to the health system: A look outside Latin America and the Caribbean Priyanka Saksena and Ke Xu 3 November, 2008 Santiago 1 The distribution of household
Public Disclosure Authorized Policy Research Working Paper 4888 WPS4888 Public Disclosure Authorized Public Disclosure Authorized Informality in Latin America and the Caribbean Norman V. Loayza Luis Servén
Rodolfo Debenedetti Lecture Andrei Shleifer March 2005 Legal Origin Distribution Legal Origins = English = French = German = Scandinavian = Socialist Institution Procedural Formalism Outcomes Time to evict
2012 The State of Food and Agriculture Investing in agriculture for a better future Kostas G. Stamoulis Director, Agricultural Development Economics Division Food and Agriculture European Parliament, Committee
Adaptation to land constraints: Is Africa different? Derek Headey International Food Policy Research Institute (IFPRI) Thom Jayne Michigan State University (MSU) 1 1. Introduction Some 215 years ago, Malthus
The contribution of trade in financial services to economic growth and development Thorsten Beck Finance why do we care? 0.04 BWA GDP per capita growth 0.02 0.00-0.02 COG SLE ALB GAB IND KOR TUR SGP MUS
The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded Andrea F. Presbitero Alberto Zazzaro 1 Università Politecnica delle Marche 2 Money and Finance Research group (MoFiR) Real and
WORLD BANK 1 Malaysia is rich in natural resources Composition of Malaysia s national wealth, 2005 19.7 Intangible Capital 13% 8% Subsoil assets 26.0-1.2 55.5 Net Foreign Assets Produced Capital Natural
Online Appendix to The Missing Food Problem: Trade, Agriculture, and International Income Differences Trevor Tombe, Uversity of Calgary Contents 1 Proof of Propositions 2 2 Data and Sample of Countries
The geography of development within countries J. Vernon Henderson Brown University & NBER June 2012 GDN 13TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE Urbanization and Development: Delving Deeper into the Nexus
CESifo Economic Studies Advance Access published May 22, 2014 CESifo Economic Studies, 2014, doi:10.1093/cesifo/ifu019 The Role of Women in Society: from Preindustrial to Modern Times Paola Giuliano UCLA
Econ 1340: World Economic History Lecture 16 Camilo Gracía-Jimeno University of Pennsylvania April 4, 2011 Camilo Gracía-Jimeno (University of Pennsylvania)Econ 1340: World Economic History April 4, 2011
International Economics and Business Dynamics Class Notes Long run growth 2: The Solow model Revised: November 7, 2012 Latest version available at http://www.fperri.net/teaching/20205.htm Why do we see
Measuring Services Trade Restrictions Aaditya Mattoo (based on research with Ingo Borchert and Batshur Gootiiz) Development Research Group The World Bank 11 March 2012 Motivation: Policy Transparency and
Metrics Matters: Measures of Governance and Security and the Business Perspective An initial empirical exploration Daniel Kaufmann, World Bank Institute www.worldbank.org/wbi/governance For presentation
Overview of Growth Research in the Past Two Decades by Pete Klenow Stanford University and NBER September 21, 2010 Early Growth Research 1950s Solow (1956) 1960s Nelson and Phelps (1966) 1970s Dark Ages
POPULATION DENSITY, LAND, AND FUTURE TRAJECTORIES OF STRUCTURAL TRANSFORMATION IN AFRICA T.S. Jayne, Jordan Chamberlin, Milu Muyanga, Derek Headey Michigan State University, USA Plenary presentation at
Specialization Patterns in International Trade Walter Steingress November 16, 2015 Abstract The pattern of specialization is key to understanding how trade affects the production structure of an economy.
The Social Statistics Discipline Area, School of Social Sciences Session 5x: Bonus material Mitchell Centre for Network Analysis Johan Koskinen http://www.ccsr.ac.uk/staff/jk.htm! firstname.lastname@example.org
Subjective Well Being and Income: Is There Any Evidence of Satiation? * Betsey Stevenson The Gerald R. Ford School of Public Policy, University of Michigan & CESifo and NBER email@example.com www.nber.org/~bstevens
Bands (considered to be) Shared on an Equal Basis Between Space and Terrestrial Services (for Region 1) Source: RR2012 Art 5, Art 9, Art 21, App 5, App 7; Rules of Procedure 2012 Rev. 5 Lower 137 137.025
Région et Développement n - BUILDING A DATASET FOR BILATERAL MARITIME CONNECTIVITY Marco FUGAZZA *, Jan HOFFMANN *, Rado RAZAFINOMBANA * Abstract - This paper presents a unique database reporting the shortest
E-government as an anti-corruption tool Thomas Barnebeck Andersen Department of Economics, University of Copenhagen March 2008 Abstract This paper estimates the impact of changes in e-government on changes
U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T POLICY ISSUES IN INTERNATIONAL TRADE AND COMMODITIES STUDY SERIES No. BUILDING A DATASET FOR BILATERAL MARITIME CONNECTIVITY
A Pragmatic Approach to Capital Account Liberalization Eswar Prasad Cornell University Presentation partly based on my joint work with: Ayhan Kose, Kenneth Rogoff, Shang-Jin Wei (2003, 2006) Raghuram Rajan
Country Risk Classifications of the Participants to the Arrangement on Officially Supported Export Credits 19992013 8 9 10 11 12 13 01Jan99 22Jan99 19Mar99 1Jun99 14Oct99 24Jan00 29Jan99 2Mar99 24Jun99
A Survey of Securities Laws and Enforcement Preliminary Draft By Florencio Lopez-de-Silanes YALE University and NBER October 2003 *I am indebted to Patricio Amador, Jose Caballero and Manuel Garcia-Huitron
EC 2725 April 2009 Law and Finance Effi Benmelech Harvard & NBER Broad Picture A market economy is not only laissez faire but it also requires a set of institutions that allow markets to work their magic.
Introduction Constructing an Index of Objective Indicators of Good Governance Steve Knack & Mark Kugler PREM Public Sector Group, World Bank October 2002 Different indicators of good governance are appropriate
MARCH 14 Number 137 Global Value Chains in the Current Trade Slowdown Michael J. Ferrantino and Daria Taglioni Real growth in global trade has decelerated significantly since its sharp recovery in 1. Year-on-year