Public policies, productivity and economic growth in OECD countries

Since mid-1990s social sciences have re-started to give attention to the role played by the state in promoting economic growth, with important contributions from economists, sociologists and political scientists. This attention further increased after the economic and financial crisis of 2007/08 with a rising strand of research that is focusing on the institutional foundations of different growth models in advanced economies. This paper is related to this wide strand of research and analyses how industrial policies can favor the emerging of institutional conditions that are conducive to economic growth. In particular, the paper analyzes the neglected relationship between public policies and labor productivity in OECD countries. The focus is on four policy arenas that have a direct impact on labor productivity: labor market, human capital, innovation and on the efficiency of public administration. The analysis underlines a strong association between labour productivity and public policies addressed to promote training and activation, tha quality of educational institutions and inter-institutional networks in innovation. Other kind of policies, such as those addressed to flexibilise the labour market or to reduce labour costs or to increase the average number of years of schooling seem to play a minor role.