Government Size and Economic Growth in Developing Countries: A Political-Economy Framework

1997 ◽  
Vol 19 (1) ◽  
pp. 175-192 ◽  
Author(s):  
James S. Guseh
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Developing Countries ◽  
Government Size

Does This Road Go on Forever? Modelling Sustainability of Infrastructure in Developing Countries

2017 ◽  
Vol 9 (2) ◽  
pp. 69-81 ◽  
Author(s):  
Jeremy Streatfeild
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Developing Countries ◽  
Transportation Networks ◽  
Recipient Country ◽  
Institutional Capacity ◽  
Rate Of Return ◽  
Due Diligence ◽  
Political Economy Analysis ◽  
Maintenance Performance

There are not enough roads in developing countries but it is not for a lack of spending to address this shortfall. Multilateral and bilateral development agencies have invested billions of dollars to build up new transportation networks because the shortage of road supply constrains trade and economic growth. However, these new roads often do not last as long as initially anticipated so many of the same donors worry that governments will not provide sufficient maintenance of these investments. In turn, economists suggest that weak maintenance performance may be due to low institutional capacity in the recipient country or even a lack of budgetary funds—both easy fixes that warrant an optimal benefit stream according to their economic rate of return in HDM4 models (“ERR”). However, these maintenance reforms have had mixed results which we argue is the result of a deeply entrenched institutional concern that requires intricate analysis and project-tailored reform approaches to remedy. Even then, these reforms may not exhibit incremental benefits for an ERR. In sum, ERR models of roads should include a rigorous political economy analysis as a due diligence prerequisite in order to substantiate any included assumptions of maintenance reforms resulting from a donor project.

Contingent Democrats: Industrialists, Labor, and Democratization in Late-Developing Countries

2000 ◽  
Vol 52 (2) ◽  
pp. 175-205 ◽  
Author(s):  
Eva Bellin
Keyword(s):  
Economic Growth ◽  
International Economic ◽  
Political Economy ◽  
Developing Countries ◽  
Economic Integration ◽  
State Dependence ◽  
Late Development ◽  
Welfare Policies ◽  
Support For Democracy ◽  
The Impact

Many classic works of political economy have identified capital and labor as the champions of democratization during the first wave of transition. By contrast, this article argues for the contingent nature of capital and labor's support for democracy, especially in the context of late development. The article offers a theory of democratic contingency, proposing that a few variables, namely, state dependence, aristocratic privilege, and social fear account for much of the variation found in class support for democratization both across and within cases. Conditions associated with late development make capital and labor especially prone to diffidence about democratization. But such diffidence is subject to change, especially under the impact of international economic integration, poverty-reducing social welfare policies, and economic growth that is widely shared. Case material from Korea, Indonesia, Mexico, Zambia, Brazil, Tunisia and other countries is offered as evidence.

Re-Thinking the Role of Institutions in Neoliberalism From New Institutional Economics Perspective

2020 ◽  
pp. 25-40
Author(s):  
Ilke Civelekoglu ◽  
Basak Ozoral
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Developing Countries ◽  
Property Rights ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
The Political ◽  
Formal Institutions ◽  
Fertile Ground

In an attempt to discuss neoliberalism with a reference to new institutional economics, this chapter problematizes the role of formal institutions in the neoliberal age by focusing on a specific type of formal institution, namely property rights in developing countries. New institutional economics (NIE) argues that secure property rights are important as they guarantee investments and thus, promote economic growth. This chapter discusses why the protection of property rights is weak and ineffective in certain developing countries despite their endorsement of neoliberalism by shedding light on the link between the institutional structure of the state and neoliberalism in the developing world. With the political economy perspective, the chapter aims to build a bridge between NIE and political economy, and thereby providing fertile ground for the advancement of NIE.

Political Settlements and Immiserizing Growth Episodes

2019 ◽  
pp. 85-105 ◽  
Author(s):  
Kunal Sen
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Developing Countries ◽  
High Growth ◽  
The Political ◽  
Poor Growth ◽  
Distribution Of Power ◽  
The Relationship ◽  
Growth Deceleration ◽  
Political Settlement

Economic growth in developing countries is an ‘episodic’ phenomenon, with countries undertaking discrete shifts from periods of low to periods of high growth and vice versa. Not all growth acceleration episodes lead to reductions in poverty, and there is wide variation in the relationship between growth and poverty across episodes of growth of the same magnitude or duration. This chapter shows that several cases of growth acceleration episodes may be defined as episodes of immiserizing growth, in that poverty either increases or remains roughly the same across the duration of these episodes. Similarly, the chapter shows that not all growth deceleration episodes lead to increases in poverty. A political economy explanation is presented for episodes of immiserizing growth, focusing on the nature of the political settlement, and in particular on the distribution of power. We find that settlements with dispersed vertical power can lessen the likelihood of immiserizing growth episodes. We also find that dispersed horizontal power is not necessarily conducive to pro-poor growth episodes.

The Optimal Public Expenditure in Developing Countries

2019 ◽  
Vol 35 (2) ◽  
Author(s):  
Hoang Khac Lich ◽  
Duong Cam Tu
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Public Choice ◽  
Empirical Evidence ◽  
Government Spending ◽  
Public Expenditure ◽  
Government Size ◽  
Optimal Size ◽  
Size Of Government ◽  
Factors Affecting

Many researchers believe that government expenditures promote economic growth at the first development stage. However, as public expenditure becomes too large, countries will suffer a huge tax burden and tax distortions. This suggests an optimal public expenditure at which economic growth rate is the highest. However, the optimal point would differ across countries because of differences in economic structure. In this present paper, the optimal public expenditure in the developing countries is analyzed. Based on descriptive statistics and regression analysis of 30 developing countries in the period 2004-2013, the findings of this paper are threefold: (i) public expenditure increases along with development level of countries; (ii) the optimal public expenditure is at 19. 375% of GDP; (iii) economic growth has a positive relationship with both investment and labor force, and a negative relationship with urbanization. Keywords Public expenditure; Economic growth; Fiscal policy; Government size References [1] U.F. Akpan, D.E. Abang, “Does government spending spur economic growth? Evidence from Nigeria”, Journal of Economics and Sustainable Development. 4(9) (2013) 36-52. [2] E. Abounoori, Y. Nademi, Government Size Threshold and Economic Growth in Iran (No. 259600001). EcoMod. [3] O.F. Altunc, C. AydÕn, “The Relationship between Optimal Size of Government and Economic Growth: Empirical Evidence from Turkey, Romania and Bulgaria”, Procedia-Social and Behavioral Sciences. 92 (2013) 66-75.[4] H. Aly, M. Strazicich, “Is Government Size Optimal in the Gulf Countries of the Middle East? An empirical investigation”, International Review of Applied Economics. 14 (2000) Số trang.[5] S. Asimakopoulos, Y. Karavias, “The impact of government size on economic growth: A threshold analysis”, Economics Letters, S0165-1765(15) (2015) 00519-4. [6] R.J. Barro, Government spending in a simple model of endogeneous growth, Journal of political economy. 98 (5, Part 2) (1990) S103-S125. [7] IMF, “Public expenditure reform: Making difficult choices”, chapter 2, 2014.[8] P.V. İyidoğan, T. Turan, Government Size and Economic Growth in Turkey: A Threshold Regression Analysis, Prague Economic Papers, 26 (2) (2017) 142-154. [9] G. Karras, On the optimal government size in Europe: theory and empirical evidence, The Manchester School. 65(3) (1997) 280-294. [10] D.C. Mueller, Public choice: an introduction, In The encyclopedia of public choice, Springer, Boston, MA, 2004, pp. 32-48. [11] P. Pevcin, Does optimal size of government spending exist?, University of Ljubljana. 10 (2004) 101-135. [12] R. Ram, Government size and economic growth: A new framework and some evidence from cross-section and time-series data, The American Economic Review. 76(1) (1986) 191-203. [13] U.F. Akpan, D.E. Abang, “Does government spending spur economic growth? Evidence from Nigeria”, Journal of Economics and Sustainable Development. 4(9) (2013) 36-52. [14] E. Abounoori, Y. Nademi, Government Size Threshold and Economic Growth in Iran (No. 259600001). EcoMod. [15] O.F. Altunc, C. AydÕn, “The Relationship between Optimal Size of Government and Economic Growth: Empirical Evidence from Turkey, Romania and Bulgaria”, Procedia-Social and Behavioral Sciences. 92 (2013) 66-75.[16] H. Aly, M. Strazicich, “Is Government Size Optimal in the Gulf Countries of the Middle East? An empirical investigation”, International Review of Applied Economics. 14(4) (2000) số trang.[17] D. Anderson, “Investment and Economic Growth”, World Development, 1990, pp. 1057-1079.[18] S. Asimakopoulos, Y. Karavias, “The impact of government size on economic growth: A threshold analysis”, Economics Letters. S0165-1765(15) (2015) 00519-4. [19] R.J. Barro, Government spending in a simple model of endogeneous growth, Journal of political economy. 98 (5, Part 2) (1990) S103-S125. [20] W. Chinnakum et al, Factors affecting economic output in developed countries: A copula approach to sample selection with panel data, International Journal of Approximate Reasoning, 2013. [21] M. Fay, O. Charlotte, “Urbanization without growth: A not-so-uncommon phenomenon”, Policy Research Working Paper, no. 2412: The World Bank, 2000.[22] IMF, “Public expenditure reform: Making difficult choices”, chapter 2, 2014.[23] P.V. İyidoğan, T. Turan, Government Size and Economic Growth in Turkey: A Threshold Regression Analysis, Prague Economic Papers. 26(2) (2017) 142-154. [24] G. Karras, On the optimal government size in Europe: theory and empirical evidence, The Manchester School. 65(3) (1997) 280-294. [25] A.R. Kira, The Factors Affecting Gross Domestic Product (GDP) in Developing Countries: The Case of Tanzania, European Journal of Business and Management. 5 (2013) 2222-1905. [26] M. Machado et al, “Economic Development and Economic Variables: An analyze of Emergent Countries”, Social Science Research Network, 2015. [27] D.C. Mueller, Public choice: an introduction. In The encyclopedia of public choice, Springer, Boston, MA, 2004, pp. 32-48. [28] H.O. Onchari, The relationship between public expenditure and economic growth in Kenya, University of Nairobi, 2013. [29] P. Pevcin, Does optimal size of government spending exist?, University of Ljubljana. 10 (2004) 101-135. [30] D. Potts, “Challenging the Myths of Urban Dynamics in Sub-Saharan Africa: The Evidence from Nigeria”. World Development, 2012, pp. 1382-1393.[31] R. Ram, Government size and economic growth: A new framework and some evidence from cross-section and time-series data, The American Economic Review. 76(1) (1986) 191-203. [32] P. Romer, “Increasing Returns and Long-Run Growth”, Journal of Political Economy. 94 (1986) 1002-1037.[33] R.M. Solow, “A Contribution to the Theory of Economic Growth”, The Quarterly Journal of Economics. 70 (1956) 65-94.[34] P. Upreti, Factors Affecting Economic Growth in Developing Countries, Major Themes in Economics, 2015.

Global Restructuring, Knowledge and Learning

2004 ◽  
pp. 66-76
Author(s):  
E. Hershberg
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Political Institutions ◽  
Lower Cost ◽  
International Competitiveness ◽  
Value Chains ◽  
Global Competitiveness ◽  
Global Restructuring ◽  
Intensive Exploitation ◽  
High Road

The influence of globalization on international competitiveness is considered in the article. Two strategies of economic growth are pointed out: the low road, that is producing more at lower cost and lower wages, with increasingly intensive exploitation of labor and environment, and the high road, that is upgrading capabilities in order to produce better basing on knowledge. Restrictions for developing countries trying to reach global competitiveness are formulated. Special attention is paid to the concept of upgrading and opportunities of joining transnational value chains. The importance of learning and forming social and political institutions for successful upgrading of the economy is stressed.

Contemporary Principles of Heterodox Political Economy

2009 ◽  
pp. 38-57 ◽  
Author(s):  
Ph. O’Hara
Keyword(s):  
Economic Growth ◽  
Political Economy ◽  
Economic Development ◽  
Ethnic Discrimination ◽  
Mainstream Economics ◽  
Theoretical Perspectives ◽  
Analytical Review ◽  
New Ideas ◽  
Historical Specificity ◽  
Scientific Results

In this analytical review the author describes the main trends in the modern heterodox political economy as an alternative to mainstream economics. Historical specificity as well as the contradictory and uneven character of economic development are examined in detail. The author also discusses problems of class, gender and ethnic discrimination and their influence on economic growth. It is shown that there are tendencies to convergence of different theoretical perspectives and schools, common themes, topics of research and conceptual apparatus are being formed. The forces of integration and differentiation help establish new ideas and receive interesting scientific results in such fields as development economics, macroeconomics and international economics.

Markets, Technological Change and Economic Growth (The Quaid-i-Azam Lecture)

1994 ◽  
Vol 33 (4I) ◽  
pp. 327-356 ◽  
Author(s):  
Richard G. Lipsey
Keyword(s):  
United States ◽  
Economic Growth ◽  
Developing Countries ◽  
Common Ground ◽  
The United States ◽  
Industrial Countries ◽  
Canadian Institute ◽  
Primary Focus ◽  
Short Time

I am honoured to be invited to give this lecture before so distinguished an audience of development economists. For the last 21/2 years I have been director of a project financed by the Canadian Institute for Advanced Research and composed of a group of scholars from Canada, the United States, and Israel.I Our brief is to study the determinants of long term economic growth. Although our primary focus is on advanced industrial countries such as my own, some of us have come to the conclusion that there is more common ground between developed and developing countries than we might have first thought. I am, however, no expert on development economics so I must let you decide how much of what I say is applicable to economies such as your own. Today, I will discuss some of the grand themes that have arisen in my studies with our group. In the short time available, I can only allude to how these themes are rooted in our more detailed studies. In doing this, I must hasten to add that I speak for myself alone; our group has no corporate view other than the sum of our individual, and very individualistic, views.

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