Growth and governance: A nonparametric analysis
AbstractAccording to conventional wisdom, a positive relationship exists between governance and growth. This paper reexamines this empirical relationship using nonparametric methods. We use different governance measures, as defined in World Governance Indicators provided by the World Bank. The findings show that only three of the six measures: voice and accountability, political stability, and rule of law are significantly correlated with economic growth. Regulatory control, control of corruption, and government effectiveness were found to be insignificant. The concept of growth profile curves are introduced as a visual device to interpret the results of the nonparametric analysis. We find that the empirical relationship between voice and accountability, political stability, and growth are highly nonlinear. These effects demonstrate heterogeneity across indicators, regions, and time. These empirical results are complementary to the literature on growth diagnostics in demonstrating that specific, targeted reforms to improve governance may be a more effective policy lever to encourage economic growth rather than wholesale reform. Finally, they provide a cautionary tale to practitioners using parametric methods. Journal of Comparative Economics 37 (1) (2009) 121-143.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Comparative Economics.
Volume (Year): 37 (2009)
Issue (Month): 1 (March)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622864
Governance Growth Kernel smoothing Growth profiles curves;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output per Worker than Others?,"
NBER Working Papers
6564, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
- Emmanuel Flachaire, 2001.
"The Wild Bootstrap, Tamed at Last,"
STICERD - Distributional Analysis Research Programme Papers
58, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Russell Davidson & Emmanuel Flachaire, 2000. "The Wild Bootstrap, Tamed at Last," Econometric Society World Congress 2000 Contributed Papers 1413, Econometric Society.
- Russell Davidson & Emmanuel Flachaire, 2001. "The Wild Bootstrap, Tamed at Last," Working Papers 1000, Queen's University, Department of Economics.
- Davidson, R. & Flachaire, E., 1999. "The Wild Bootstrap, Tamed at Last," G.R.E.Q.A.M. 99a32, Universite Aix-Marseille III.
- Charles I. Jones, 1997.
"On the Evolution of the World Income Distribution,"
Journal of Economic Perspectives,
American Economic Association, vol. 11(3), pages 19-36, Summer.
- Whitney K. Newey & James L. Powell & Francis Vella, 1999.
"Nonparametric Estimation of Triangular Simultaneous Equations Models,"
Econometric Society, vol. 67(3), pages 565-604, May.
- Whitney K. Newey & James L. Powell & Francis Vella, 1998. "Nonparametric Estimation of Triangular Simultaneous Equations Models," Working papers 98-6, Massachusetts Institute of Technology (MIT), Department of Economics.
- Whitney Newey & James Powell & Francis Vella, 1998. "Nonparametric Estimation of Triangular Simultaneous Equations Models," Working papers 98-16, Massachusetts Institute of Technology (MIT), Department of Economics.
- Quah, Danny, 1993.
"Empirical cross-section dynamics in economic growth,"
European Economic Review,
Elsevier, vol. 37(2-3), pages 426-434, April.
- Danny Quah, 1992. "Empirical cross-section dynamics in economic growth," Discussion Paper / Institute for Empirical Macroeconomics 75, Federal Reserve Bank of Minneapolis.
- Danny Quah, 1992. "Empirical Cross-Section Dynamics in Economic Growth," FMG Discussion Papers dp154, Financial Markets Group.
- Kim Huynh & David Jacho-Chavez, 2007. "Conditional density estimation: an application to the Ecuadorian manufacturing sector," Economics Bulletin, AccessEcon, vol. 3(62), pages 1-6.
- Klapper, Leora & Amit, Raphael & Guillen, Mauro F. & Quesada, Juan Manuel, 2007.
"Entrepreneurship and firm formation across countries,"
Policy Research Working Paper Series
4313, The World Bank.
- Leora Klapper & Raphael Amit & Mauro F. Guillén, 2010. "Entrepreneurship and Firm Formation across Countries," NBER Chapters, in: International Differences in Entrepreneurship, pages 129-158 National Bureau of Economic Research, Inc.
- Daniel Kaufmann & Aart Kraay, 2002.
"Growth without Governance,"
Journal of LACEA Economia,
LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
- Racine, Jeff, 1997. "Consistent Significance Testing for Nonparametric Regression," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(3), pages 369-78, July.
- Qi Li & Jeffrey Scott Racine, 2006. "Nonparametric Econometrics: Theory and Practice," Economics Books, Princeton University Press, edition 1, volume 1, number 8355, March.
- Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004.
"Do Institutions Cause Growth?,"
Journal of Economic Growth,
Springer, vol. 9(3), pages 271-303, 09.
- Dani Rodrik, 2006. "Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank's Economic Growth in the 1990s: Learning from a Decade of Reform," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 973-987, December.
- Li, Qi & Racine, Jeff, 2003. "Nonparametric estimation of distributions with categorical and continuous data," Journal of Multivariate Analysis, Elsevier, vol. 86(2), pages 266-292, August.
- Acemoglu,Daron & Robinson,James A., 2006.
"Economic Origins of Dictatorship and Democracy,"
Cambridge University Press, number 9780521855266.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Hsiao, Cheng & Li, Qi & Racine, Jeffrey S., 2007.
"A consistent model specification test with mixed discrete and continuous data,"
Journal of Econometrics,
Elsevier, vol. 140(2), pages 802-826, October.
- Cheng Hsiao & Qi Li & Jeff Racine, 2006. "A Consistent Model Specification Test with Mixed Discrete and Continuous Data," IEPR Working Papers 06.47, Institute of Economic Policy Research (IEPR).
- Jeffery Racine & Jeffrey Hart & Qi Li, 2006. "Testing the Significance of Categorical Predictor Variables in Nonparametric Regression Models," Econometric Reviews, Taylor and Francis Journals, vol. 25(4), pages 523-544.
- Ricardo Hausmann & Bailey Klinger, 2008. "Growth Diagnostics: Perú," Research Department Publications 2005, Inter-American Development Bank, Research Department.
- G. S. Maddala, 1999. "On the Use of Panel Data Methods with Cross-Country Data," Annales d'Economie et de Statistique, ENSAE, issue 55-56, pages 429-448.
- Hausmann, Ricardo & Klinger, Bailey, 2008. "Growth Diagnostics in Peru," Working Paper Series rwp08-62, Harvard University, John F. Kennedy School of Government.
- Evrensel, Ayse Y., 2010. "Corruption, growth, and growth volatility," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 501-514, June.
- Alexander Libman, 2012.
"Democracy and Growth: Is The Effect Non-Linear?,"
The Economic Research Guardian,
Weissberg Publishing, vol. 2(1), pages 99-120, May.
- Crombrugghe, Denis de & Farla, Kristine, 2012. "Preliminary conclusions on institutions and economic performance," UNU-MERIT Working Paper Series 035, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
- Yulia Kotlyarova & Marcia M Schafgans & Victoria Zinde-Walsh, 2011. "Adapting Kernel Estimation to Uncertain Smoothness," STICERD - Econometrics Paper Series /2011/557, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Halkos, George & Tzeremes, Nickolaos, 2012. "Carbon dioxide emissions and governance: A nonparametric analysis for the G-20," MPRA Paper 40387, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.