Advanced Search
MyIDEAS: Login to save this paper or follow this series

Explaining miracles : growth regressions meet the Gang of Four

Contents:

Author Info

  • Easterly, William
  • DEC

Abstract

The authorexamines a range of cross-sectional variation in performance and policies for evidence on what distinguishes successes from failures. At about 6 percent, the growth rate of the Four Tigers - Hong Kong, the Republic of Korea, Singapore, and Taiwan (China) - are among the largest outliners in any study of growth. This is not surprising, says the author. The Four Tigers are Tigers because their growth rate was high. The Four generally have large positive residuals in growth regressions, but the author argues that this is not surprising for observations that were known in advance to be at the top of the sample. But growth regressions and, more generally, quantitative measures of"policies"are not very successful at picking out the Gang of Four as"most likely to succeed."Most observers before the"miracle"were pessimistic about East Asia. The Four are not nearly as superlative in policies and other country characteristics as they are in per capita growth rates. Large positive residuals such as those associated with the Four's high performance have historically been transitory. The stratospheric trajectory of the Four should be heading back toward earth soon, says the author. What may be unusual about the Four's success is that they were all in one region. At least casually, the Asian successes look a lot like growth radiating from poles, with Japan followed by the Gang of Four, followed by China, Thailand, Malaysia, and Indonesia. The great success of the Gang of Four does not imply a blanket endorsement of all their policies - they may have made mistakes that were more than offset by other good policies and, probably at least in part, by good luck. It is disturbing how large and transitory the unexplained element is in economic success. Perhaps the best way to think about good policies is that they make success likely sooner or later. When all is said and done, the story of the East Asian successes is consistent with the prosaic fundamentals: investment, education, financial depth, and low budget deficits. In these areas, the Four were above average.

Download Info

If 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.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1994/02/01/000009265_3961005210557/Rendered/PDF/multi0page.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1250.

as in new window
Length:
Date of creation: 28 Feb 1994
Date of revision:
Handle: RePEc:wbk:wbrwps:1250

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Economic Conditions and Volatility; Achieving Shared Growth; Governance Indicators; Economic Growth; Inequality;

Other versions of this item:

References

References listed on IDEAS
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.:
as in new window
  1. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
  2. Wontack Hong, 1993. "Export-Oriented Growth and Equity in Korea," NBER Chapters, in: Trade and Protectionism, NBER-EASE Volume 2, pages 413-436 National Bureau of Economic Research, Inc.
  3. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-52, December.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
  4. William Easterly & Michael Kremer & Lant Pritchett & Lawrence H. Summers, 1993. "Good Policy or Good Luck? Country Growth Performance and Temporary Shocks," NBER Working Papers 4474, National Bureau of Economic Research, Inc.
  5. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
  6. repec:fth:stanho:e-93-6 is not listed on IDEAS
  7. Lucas, Robert E, Jr, 1993. "Making a Miracle," Econometrica, Econometric Society, vol. 61(2), pages 251-72, March.
  8. Collins, Susan M, 1990. "Lessons from Korean Economic Growth," American Economic Review, American Economic Association, vol. 80(2), pages 104-07, May.
  9. Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
  10. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  11. Michael Bruno, 1993. "Inflation and Growth in an Integrated Approach," NBER Working Papers 4422, National Bureau of Economic Research, Inc.
  12. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 513-542, December.
  13. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
  14. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
  15. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Feenstra, Robert C. & Madani, Dorsati & Yang, Tzu-Han & Liang, Chi-Yuan, 1999. "Testing endogenous growth in South Korea and Taiwan," Journal of Development Economics, Elsevier, vol. 60(2), pages 317-341, December.
  2. Areendam Chanda, 2002. "The Influence of Capital Controls on Long Run Growth: Where and How Much?," International Finance 0201001, EconWPA.
  3. Ang, James & Madsen, Jakob, 2009. "Can Second-Generation Endogenous Growth Models Explain The Productivity Trends and Knowledge Production In the Asian Miracle Economies?," MPRA Paper 17543, University Library of Munich, Germany.
  4. J. Cunado & L.A. Gil-Alana & F. Perez De Gracia, 2007. "Real convergence in some emerging countries : a fractionally integrated approach," Discussion Papers (REL - Recherches Economiques de Louvain) 2007034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. Lee Kian Lim & Michael McAleer, 2004. "Convergence and catching up in ASEAN: a comparative analysis," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 137-153.
  6. Cunado, J. & Gil-Alana, L. A. & Perez de Gracia, F., 2004. "Real convergence in Taiwan: a fractionally integrated approach," Journal of Asian Economics, Elsevier, vol. 15(3), pages 529-547, June.
  7. Lee Kian Lim, 2000. "Convergence and Catching Up in South-East Asia: A Comparative Analysis," Econometric Society World Congress 2000 Contributed Papers 1844, Econometric Society.
  8. Leung, H. M. & Tan, Swee Liang & Yang, Zhen Lin, 2004. "What has luck got to do with economic development? An interpretation of resurgent Asia's growth experience," Journal of Policy Modeling, Elsevier, vol. 26(3), pages 373-385, April.
  9. Birdsall, Nancy & Rhee, Changyong, 1993. "Does results and development (R&D) contribute to economic growth in developing countries?," Policy Research Working Paper Series 1221, The World Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1250. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

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.