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Theory and Evidence on the Political Economy of Growth

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Author Info
Fabrizio Carmignani () (Department of Economics, University of Milan-Bicocca and Department of Economics, University of Glasgow)
Abstract

Some recent developments in the literature on the political economy of economic growth are considered in this paper. First, limitations of traditional cross-sectional analysis are discussed. Attention is focused on the problems of omitted variables and model uncertainty. Advantages and disadvantages of alternative methods are discussed as well as evidence obtained from the application of panel techniques and time-series analysis. Second, the relationship between initial inequality and subsequent economic growth is reconsidered in the light of the empirical evidence recently produced by contributions that make use of panel models and high-quality data on income distribution. Third, the role of special interest politics is investigated. Other than lobbying, the “common-pool” problem is an instance of main interest in the political economy literature. It predicts that more fragmented governments are associated to lower growth. I test this prediction on a panel of western European countries. Results appear to be consistent with the theoretical argument.

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File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper33.pdf
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Publisher Info
Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 33.

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Length: 38 pages
Date of creation: Jan 2001
Date of revision: Jan 2001
Handle: RePEc:mib:wpaper:33

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Keywords: Political variables; growth empirics and theory;

Find related papers by JEL classification:
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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  1. Axel Dreher, 2002. "Does Globalization Affect Growth?," Development and Comp Systems 0210004, EconWPA, revised 04 Feb 2003. [Downloadable!]
  2. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor and Francis Journals, vol. 38(10), pages 1091-1110, June. [Downloadable!] (restricted)
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