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External and internal determinants of development

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Thomas Osang

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Abstract

As Rodrik, Subramanian, and Trebbi (2004) point out, factors that affect economic development can be classified using a two-tier approach. Based on a standard production function, inputs such as labor and physical and human capital directly affect per capita income. Much of the empirical cross-country growth literature has focused on these covariates. But the factors themselves are the product of deeper and more fundamental determinants and, thus, are at best proximate factors of economic development. The deeper determinants fall into two broad categories: internal and external. Among the former, institutions and geography have received the most attention, while international trade has been the focus of the latter. The main purpose of this paper is to add an external factor, namely measures of migration, to the existing geography-institutions-trade setup and to evaluate its contribution to the observed differences in per capita income across countries.

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Article provided by Federal Reserve Bank of Dallas in its journal Proceedings.

Volume (Year): (2006)
Issue (Month): ()
Pages: 35-59
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Handle: RePEc:fip:feddpr:y:2006:p:35-59

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Keywords: Emigration and immigration ; International trade ; Economic development ; Developing countries ; Geography;

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  1. Easterly, William & Levine, Ross, 2003. "Tropics, germs, and crops: how endowments influence economic development," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 3-39, January. [Downloadable!] (restricted)
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  2. Ramón López & Maurice Schiff, 1998. "Migration and the Skill composition of the Labor Force: The Impact of Trade Liberalization in LDCs," Canadian Journal of Economics, Canadian Economics Association, vol. 31(2), pages 318-336, May.
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  5. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  6. 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. [Downloadable!] (restricted)
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  7. Rodney D. Ludema & Ian Wooton, 1997. "Regional Integration, Trade, and Migration: Are Demand Linkages Relevant in Europe?," Working Papers 9704, Department of Economics, University of Glasgow, revised Jul 1997. [Downloadable!]
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  8. Hanson, Gordon H. & Slaughter, Matthew J., 2002. "Labor-market adjustment in open economies: Evidence from US states," Journal of International Economics, Elsevier, vol. 57(1), pages 3-29, June. [Downloadable!] (restricted)
  9. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, vol. 59(04), pages 1043-1062, December. [Downloadable!]
  10. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 1-118. [Downloadable!]
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  12. Donald R. Davis & David E. Weinstein, 2002. "Technological superiority and the losses from migration," Discussion Papers 0102-60, Columbia University, Department of Economics. [Downloadable!]
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  13. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February. [Downloadable!] (restricted)
  14. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Alan M. Taylor, 1995. "Growth and Convergence in the Asia-Pacific Region: On the Role of Openness, Trade and Migration," NBER Working Papers 5276, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06. [Downloadable!]
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  19. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Jeffrey A. Frankel & David Romer, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June. [Downloadable!] (restricted)
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