The Political Determinants of Economic Performance

2005 ◽  
Vol 38 (1) ◽  
pp. 26-50 ◽  
Author(s):  
Pablo M. Pinto ◽  
Jeffrey F. Timmons
Keyword(s):  
Economic Growth ◽  
Economic Performance ◽  
Capital Accumulation ◽  
Political Competition ◽  
Physical Capital ◽  
Regime Type ◽  
The Political ◽  
Productivity Change ◽  
Political Determinants ◽  
Physical Capital Accumulation

The authors present and test a theory about the effects of political competition on the sources of economic growth. Using Mankiw, Romer, and Weil’s model of economic growth and data for roughly 80 countries, the authors show that political competition decreases the rate of physical capital accumulation and labor mobilization but increases the rate of human capital accumulation and (less conclusively) the rate of productivity change. The results suggest that political competition systematically affects the sources of growth, but those effects are cross-cutting, explainingwhy democracy itself may be ambiguous. These findingshelp clarify the debate about regime type and economic performance and suggest new avenues for research.

scholarly journals Financial Development and Economic Growth in ASEAN-5 Countries

2018 ◽  
Vol 20 (1) ◽  
pp. 57-71 ◽  
Author(s):  
Chinnasamy Agamudai Nambhi Malarvizhi ◽  
Yashar Zeynali ◽  
Abdullah Al Mamun ◽  
Ghazali Bin Ahmad
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Economic Efficiency ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Significant Positive Effect ◽  
Domestic Investment ◽  
The Relationship ◽  
Physical Capital Accumulation ◽  
Positive Effect

This article explores the relationship between financial sector development and economic growth, using a sample of ASEAN-5 countries (Malaysia, Indonesia, Singapore, Thailand and Philippines) from 1980 to 2011. More specifically, this study investigates whether higher levels of financial development (FD) are significantly and robustly correlated with faster current and future rates of economic growth, physical capital accumulation and economic efficiency improvements. Findings of this study revealed that FD has a significant positive effect on economic growth. However, the estimated models show that the influence of FD, as a determinant for economic growth of ASEAN-5 countries, is less than that of domestic investment and export.

scholarly journals Capital formation and economic growth under central planning and transition: A theoretical and empirical analysis, ca. 1920–2008

2015 ◽  
Vol 65 (1) ◽  
pp. 27-50 ◽  
Author(s):  
Péter Földvári ◽  
Bas van Leeuwen ◽  
Dmitry Didenko
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Growth Models ◽  
Physical Capital ◽  
Early Years ◽  
National Accounts ◽  
System Of National Accounts ◽  
Long Run ◽  
Physical Capital Accumulation

According to the consensus view, it was primarily physical capital accumulation that drove economic growth during the early years of state socialism. Growth models incorporating both human and physical capital accumulation led to the conclusion that a high physical/human capital ratio can cause a lower economic growth in the long run, hence offering an explanation for the failure of socialist economies. In this paper, we show theoretically and empirically that according to the logic of the socialist planner, it was optimal to achieve a higher physical to human capital ratio in socialist countries than in the West. Using a VAR analysis, we find empirical confirmation that within the Material Product System of national accounting, the relative dominance of investment in physical capital accumulation relative to human capital was indeed more efficient than under the system of national accounts.

scholarly journals IS HUMAN CAPITAL ACCUMULATION A GROWTH DRIVER IN NIGERIA? AN EMPIRICAL INVESTIGATION

2018 ◽  
Vol 3 (2) ◽  
pp. 66-77
Author(s):  
Hassan O. Ozekhome
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Physical Capital ◽  
The Other ◽  
Series Data ◽  
Human Capital Accumulation ◽  
Infrastructural Development ◽  
Long Run ◽  
Physical Capital Accumulation

Accumulation of human capital is critical to sustained economic growth in the long run, since it facilitates the efficient absorption of new capital developments, improves the speed of adaptation of entrepreneurs and generates innovation necessary for sustained economic growth. It is against this premise this study investigate the human-capital accumulation growth-nexus in Nigeria. Employing a dynamic approach, involving test for unit roots, and cointegration, and finally, the Generalized Method of Moments (GMM) estimation techniques on annual time series data, covering the period 1981 to 2016, sourced from the World Bank Development Indicators (WDI) and Central Bank of Nigeria (CBN) Statistical Bulletin, the empirical findings reveal that human and physical capital accumulation significantly induce rapid and sustained economic growth in the long-run. The other variables- infrastructural development (measured by ICT infrastructure) and industrial output (a measure of industrialization) have positive but weak impacts on economic growth, on account of the weak infrastructural development, and low level of industrialization in Nigeria. Inflation rate (a measure of macroeconomic policy environment) on the other hand, is found to have a militating effect on economic growth. We recommend amongst others; sustained investments in human and physical capital accumulation, stable and coherent macroeconomic policies, particularly with respect to taming of domestic inflationary pressures, supportive institutional structures and aggressive industrialization-enhancing policies, in order to enhance sustained economic growth in Nigeria.

Physical capital stock, technological upgrading and modernisation in Hungary

2005 ◽  
Vol 55 (2) ◽  
pp. 201-221 ◽  
Author(s):  
Andrea Szalavetz
Keyword(s):  
Capital Accumulation ◽  
Physical Capital ◽  
Developed Countries ◽  
Point Of View ◽  
Technology Generation ◽  
Development Policies ◽  
Specific Factors ◽  
Physical Capital Accumulation

This paper discusses the relation between the quality and quantity indicators of physical capital and modernisation. While international academic literature emphasises the role of intangible factors enabling technology generation and absorption rather than that of physical capital accumulation, this paper argues that the quantity and quality of physical capital are important modernisation factors, particularly in the case of small, undercapitalised countries that recently integrated into the world economy. The paper shows that in Hungary, as opposed to developed countries, the technological upgrading of capital assets was not necessarily accompanied by the upgrading of human capital i.e. the thesis of capital skill complementarity did not apply to the first decade of transformation and capital accumulation in Hungary. Finally, the paper shows that there are large differences between the average technological levels of individual industries. The dualism of the Hungarian economy, which is also manifest in terms of differences in the size of individual industries' technological gaps, is a disadvantage from the point of view of competitiveness. The increasing differences in the size of the technological gaps can be explained not only with industry-specific factors, but also with the weakness of technology and regional development policies, as well as with institutional deficiencies.

scholarly journals Optimal taxation with unobservable investment in human capital

2019 ◽  
Vol 72 (2) ◽  
pp. 501-516 ◽  
Author(s):  
Catarina Reis
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Optimal Taxation ◽  
Capital Investment ◽  
Physical Capital ◽  
Income Taxes ◽  
Long Run ◽  
Positive Rate ◽  
The Government ◽  
Physical Capital Accumulation

Abstract In a Ramsey model of optimal taxation, if human capital investment can be observed separately from consumption, it is optimal not to distort human or physical capital accumulation in the long run, and only labour income taxes should be used. However, in reality the government can’t always distinguish between investment in human capital and pure consumption, so a tax on labour or consumption will necessarily tax human capital. We find that when investment in human capital is unobservable, the optimal policy is to tax human capital at a positive rate, even in the long run. Whether physical capital should be taxed or not depends on its degree of complementarity with human capital versus labour.

The Origins of Productivity Change and Economic Growth in China’s Cities between the Years 2001 and 2014

2018 ◽  
Vol 06 (02) ◽  
pp. 1850012
Author(s):  
Jiancui LIU ◽  
Shilin ZHENG
Keyword(s):  
Economic Growth ◽  
Total Factor Productivity ◽  
Statistical Data ◽  
Physical Capital ◽  
Productivity Change ◽  
Factor Productivity ◽  
Transitional Processes ◽  
Second Tier ◽  
Theory Research ◽  
Factor Inputs

Total factor productivity represents not only the core of neo-classical growth theory research, but is also a key component in the understanding of the transitional processes of China from a factor-driven to an innovation-driven economy. In this paper, relying on 2000–2014 year statistical data, drawn from China’s four centrally administered and 283 provincial-level cities, the paper’s authors apply Cobb–Douglas production function methods to the calculation of urban total factor productivity rates of increase, and to changes in differing factor inputs, to show how, during the period of interest, involved changes impacted China’s economic growth. The analysis finds that: (1) between the years 2001 and 2005, changes in total factor productivity represented an important source of economic growth, but that after 2005 China’s economic growth clearly exhibited physical capital-driven features; (2) from 2012 onwards, influenced by resource-based and heavy chemical industries, the decrease in total factor productivity of China’s central region cities was the greatest (among the various areas), revealing an “extensive” aspect, and in 2014 the contribution rates of the region’s cities’ physical capital and total factor productivity were 127.77% and [Formula: see text]36.6%, respectively; (3) examining the cities based on their differing classifications, after 2012, the contribution rates of the fourth-tier cities’ total factor productivities underwent severe declines, while in China’s first- and second-tier cities the contribution rates of their total factor productivities exhibited signs of recovery.

Infrastructure and Economic Transformation in Ethiopia

2019 ◽  
pp. 190-212
Author(s):  
Seid Nuru
Keyword(s):  
Economic Growth ◽  
Capital Accumulation ◽  
Poverty Reduction ◽  
Physical Capital ◽  
Well Being ◽  
Economic Transformation ◽  
Infrastructure Development ◽  
Rail Network ◽  
Development Agenda ◽  
The Cost

Investment in infrastructure has a central role in the development agenda and is critical for supporting economic growth and poverty reduction. Infrastructure affects growth through two channels: directly through physical capital accumulation and indirectly through improvement in productivity. Investment in infrastructure enhances private sector activities by lowering the cost of production and opening new markets. Infrastructure investment in power generation, water, sanitation, and housing improves the social well-being of citizens. This chapter examines the pace and scale of infrastructure development in Ethiopia in the post-1991 period. The unparalleled expansion of infrastructure since the EPRDF came to power in 1991 has had a significant influence on the trajectory of Ethiopia’s economic growth. Investment in infrastructure now accounts for more than 15 per cent of GDP annually. Heavy investments in power, roads, rail network, irrigation, aviation, and logistics have helped to unleash the country’s potential both economically and as a major manufacturing hub in Africa.

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