scholarly journals EFFECTS OF RENT-SEEKING ON ECONOMIC GROWTH IN LOW-INCOME ECONOMIES

2021 ◽  
Vol 24 (2) ◽  
pp. 205-220
Author(s):  
Zi Wen Vivien Wong ◽  
Fanyu Chen ◽  
Thian Hee Yiew
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
High Performance ◽  
Generalized Method Of Moments ◽  
Rent Seeking ◽  
Sustainable Growth ◽  
Low Income Countries ◽  
Limited Attention ◽  
Economic Implications ◽  
Method Of Moments Estimator

Sluggish growth in low-income countries, despite the high performance in other economic indicators, motivates the literature to switch attention to institutions. Despite its crucial economic implications, there is limited attention on rent-seeking as a driver of economic growth in low-income countries. This paper investigates the effect of rent-seeking on growth in low-income countries from 2004 to 2017using the system generalized method of moments estimator. The empirical results reveal that rent-seeking negatively affects growth, implying that it obstructs the pace of economic development in low-income countries. Hence, it is necessary for policymakers in these countries to adopt anti-rent-seeking policies to promote a rapid and sustainable growth.

scholarly journals Technological Spillover, Growth Convergence And Technical Progress: Does technology flow from rich to poor economies?

2020 ◽  
Vol 8 (4) ◽  
pp. 132-145
Author(s):  
Oladele O Aluko ◽  
B. Sabiu Sani
Keyword(s):  
Economic Growth ◽  
Technical Progress ◽  
Low Income ◽  
Generalized Method Of Moments ◽  
Low Income Countries ◽  
Dynamic Panel Model ◽  
Poor Countries ◽  
Growth Convergence ◽  
Using Data ◽  
The One

This study examines Technology spillover from rich to poor countries, the study used a model that, at the aggregate level, is similar to the one sector neoclassical growth model. The model was estimated using data on technical progress, Average Product Per-Worker, Capital Stock and Technology Intensive Goods in 25 countries which consist of rich and poor countries over the last decade. A dynamic panel model is formulated and estimated Using Generalized method of moments by Arelano and Bond; and the implications of the estimates were evaluated for aggregate total factor productivity and economic growth. The results reveal that, on average, technology have contributed more to economic growth in high income economies and on the contrary technology have made little or no contribution in low income countries. Consequently, there is substantial variation across technologies and economies

scholarly journals On the determinants of trade openness in low- and lower–middle-income countries in Africa: how important is economic growth?

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Dennis Boahene Osei ◽  
Yakubu Awudu Sare ◽  
Muazu Ibrahim
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Low Income Countries ◽  
Special Focus ◽  
Middle Income ◽  
Middle Income Countries ◽  
Real Gdp Per Capita ◽  
The Impact

AbstractThe existing literature highlights the determinants of trade openness with disregard to the income classifications of countries in examining whether the determinants differ given their income levels. This study, therefore, re-examines the drivers of trade openness in Africa relying on panel data with special focus on the role of economic growth. More specifically, we perform a comparative analysis of the factors influencing trade openness for low-income and lower–middle-income countries using the system generalized method of moments. Our findings suggest that, while economic growth robustly enhances openness in low-income countries, in the case of lower–middle-income countries, the impact is not robust and largely negative suggesting that higher growth is associated with less openness. We also find that, economic growth–openness nexus for the lower-income countries exhibits non-linearities and inverted U-shaped relationship in particular. Thus, while increases in real GDP per capita enhance openness, beyond an estimated threshold point, any increases in economic growth dampen openness. We discuss key implications for policy.

scholarly journals Harnessing Women’s Potential as a Soft Engine for Growth – Lessons from Contrasting Trajectories between Finland and Japan for Growing Economies

1970 ◽  
Vol 8 (1) ◽  
pp. 67-92
Author(s):  
Chihiro Watanabe ◽  
Kashif Naveed ◽  
Pekka Neittaanmäki
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
High Performance ◽  
Emerging Countries ◽  
Sustainable Growth ◽  
Industrialized Countries ◽  
Gender Balance ◽  
Information And Communication ◽  
Specific Culture ◽  
And Gender

Harnessing the vigor of women’s potential is essential for inclusive economic growth in a digital economy moving toward aging society. This can be a soft engine for sustainable growth substitutable for costly hard investment. While there exists explicit evidence of a virtual cycle between economic growth and gender balance improvement, emerging countries cannot afford to overcome the constraints of low income. Given the foregoing, this paper analyzed possible co-evolution between economic growth, gender balance improvement and digital innovation initiated by information and communication technology (ICT) advancement. Using a unique dataset representing the state of gender balance improvement in the function of economic growth and ICT advancement, an empirical numerical analysis of 44 countries was attempted. These countries were classified as emerging, industrialized and with a specific culture. It was found that while industrialized countries, typically Finland, have realized high performance in co-evolution, emerging countries have been constrained by low ICT advancement, and countries with a specific culture have, notwithstanding their high economic level, also been constrained by a traditional male-dominated culture. Japan is a typical case. Based on these findings, lessons from contrasting trajectories between Finland and Japan for emerging countries were analyzed. It is suggested that advancement of ICT, not only quantitatively but also qualitatively in such a way as constructing a self-propagating system, is crucial for emerging countries. A new practical approach for harnessing the potential resources for sustainable growth was thus explored.

scholarly journals Foreign aid on economic growth in Africa: A comparison of low and middle-income countries

2015 ◽  
Vol 18 (4) ◽  
pp. 449-462 ◽  
Author(s):  
Aye Mengistu Alemu ◽  
Jin-Sang Lee
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Low Income ◽  
Empirical Studies ◽  
Critical Role ◽  
Generalized Method Of Moments ◽  
African Countries ◽  
Middle Income ◽  
Middle Income Countries ◽  
Theoretical Hypothesis

Previous empirical studies on the effects of foreign aid on economic growth have generated mixed results that make it difficult to draw policy recommendations. The main reason for such mixed results is the choice of a single aggregate list of countries, regardless of the disparities in levels of development. This study therefore fills the development gap by disaggregating the African data into a panel of 20 middle- income and 19 low- income African countries over a period of 15 years between 1995 and 2010, and employing a dynamic generalized method of moments (GMM) model to address the dynamic nature of economic growth as well as the problems of endogeneity. The results of this study support the theoretical hypothesis that a positive relationship between aid and GDP growth exists, but only for low-income African countries, not middle-income ones. On the other hand, the study reveals that middle- income African countries tend to experience a greater impact on their economic growth from foreign direct investment (FDI) and natural resources revenues, mainly oil exports. This implies that the frequent criticism that foreign aid has not contributed to economic growth is flawed, at least in the case of low-income African countries. In fact, foreign aid has played a critical role in stimulating economic growth in such countries through supplementing domestic sources of finance such as savings, thus increasing the amount of investment and capital stock in them.

scholarly journals Defying the Footprint Oracle: Implications of Country Resource Trends

2019 ◽  
Vol 11 (7) ◽  
pp. 2164 ◽  
Author(s):  
Mathis Wackernagel ◽  
David Lin ◽  
Mikel Evans ◽  
Laurel Hanscom ◽  
Peter Raven
Keyword(s):  
International Development ◽  
Low Income ◽  
Economic Performance ◽  
Analysis Data ◽  
Low Income Countries ◽  
Data Sets ◽  
Economic Policies ◽  
Economic Implications ◽  
Financial Assessment ◽  
Resource Dynamics

Mainstream competitiveness and international development analyses pay little attention to the significance of a country’s resource security for its economic performance. This paper challenges this neglect, examining the economic implications of countries resource dynamics, particularly for low-income countries. It explores typologies of resource patterns in the context of those countries’ economic prospects. To begin, the paper explains why it uses Ecological Footprint and biocapacity accounting for its analysis. Data used for the analysis stem from Global Footprint Network’s 2018 edition of its National Footprint and Biocapacity Accounts. Ranging from 1961 to 2014, these accounts are computed from UN data sets. The accounts track, year by year, how much biologically productive space is occupied by people’s consumption and compare this with how much productive space is available. Both demand and availability are expressed in productivity-adjusted hectares, called global hectares. Using this biophysical accounting perspective, the paper predicts countries’ future socio-economic performance. This analysis is then contrasted with a financial assessment of those countries. The juxtaposition reveals a paradox: Financial assessments seem to contradict assessments based on biophysical trends. The paper offers a way to reconcile this paradox, which also elevates the significance of biophysical country assessments for shaping successful economic policies.

Basic Human Needs versus Economic Growth Approach for Coping with Urban—Rural Imbalances: An Evaluation Based on Relative Welfare

1979 ◽  
Vol 11 (10) ◽  
pp. 1129-1145 ◽  
Author(s):  
K Mera
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Relative Position ◽  
Urban Population ◽  
Low Income Countries ◽  
Human Needs ◽  
Urban Rural ◽  
Basic Human Needs ◽  
Growth Approach ◽  
Future Growth

Increasing attention is being paid to the ‘basic human needs' approach for reducing imbalances within a developing country, urban—rural imbalances being important among them. However, as investment for meeting basic human needs is not directly productive, the future growth of the economy would have to be sacrificed if this approach is taken. In this paper the development implications of two approaches, the economic growth and the basic human needs approaches, are projected through a simulation model, and they are evaluated relative to each other. It is shown that, even if the evaluation is based on the criterion of the relative position of the rural population to the urban population, low-income countries would be better off with the economic growth approach after about ten years. For middle- and high-income countries, the basic human needs approach deserves serious consideration.

scholarly journals The Role of Population in Economic Growth

SAGE Open ◽  
2017 ◽  
Vol 7 (4) ◽  
pp. 215824401773609 ◽  
Author(s):  
E. Wesley F. Peterson
Keyword(s):  
Economic Growth ◽  
Population Growth ◽  
Low Income ◽  
Low Income Countries ◽  
High Population Growth ◽  
Economic Analyses ◽  
The Relationship ◽  
Lower Population ◽  
Capita Output

The relationship between population growth and economic growth is controversial. This article draws on historical data to chart the links between population growth, growth in per capita output, and overall economic growth over the past 200 years. Low population growth in high-income countries is likely to create social and economic problems while high population growth in low-income countries may slow their development. International migration could help to adjust these imbalances but is opposed by many. Drawing on economic analyses of inequality, it appears that lower population growth and limited migration may contribute to increased national and global economic inequality.

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