Institutional innovations, growth performance and policy
AbstractThe aggregate picture of world economic growth shows a remarkable diversity in growth performance, both geographically and across time. We find high growth countries and low growth countries; countries that have grown rapidly throughout time, and countries that have experienced growth spurts for a decade or two; countries that took off around 1980, and countries whose growth collapsed around 1980. What is the role of policy in this diversity? How can policy help transform this picture? This paper tries to answer these questions, analysing the performance of the high growth developing countries and the way they developed institutional innovations. Analysis of the success story of China, with an astonishing annual growth rate of 8.0 percent since the late 1970s, together with other well-known East Asian experiences that have taken place in countries such as South Korea and Taiwan, provide the basis to build some stylised facts about the take-off and the process of sustaining economic growth. On the other hand, the experience of liberalisation, deregulation and privatisation in countries such as Mexico, Argentina, Brazil, Colombia, Bolivia, and Peru have offered substantial evidence that allows us to question the standard formulae used to propel and maintain economic growth. The paper puts forth three main conclusions that could be extensive to the growth of sub-national regions: a) Successful reforms are those that put together sound economic principles and local capabilities, constraints and opportunities; b) Economic growth is not the natural order of things, and setting up a fair and levelled ground may not be enough to stimulate productive dynamism; c) Institutional innovation requires a not be enough to stimulate productive dynamism; pragmatic approach that avoids ideological lock-in. Keywords: Economic growth, development policy, market/government failure, institutions, spillovers, stylised facts.
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.
Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p157.
Date of creation: Aug 2004
Date of revision:
Contact details of provider:
Postal: Augasse 2-6, 1090 Vienna, Austria
Web page: http://www.ersa.org
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-09 (All new papers)
- NEP-GEO-2005-11-09 (Economic Geography)
- NEP-SOC-2005-11-09 (Social Norms & Social Capital)
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.:
- Rodriguez-Clare, Andres, 1996. "The division of labor and economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 3-32, April.
- North, Douglass C, 1994.
"Economic Performance through Time,"
American Economic Review,
American Economic Association, vol. 84(3), pages 359-68, June.
- Matsuyama, K., 1992.
"Agricultural Productivity, Comparative Advantage, and Economic Growth,"
e-92-3, Hoover Institution, Stanford University.
- Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
- Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
- Kiminori Matsuyama, 1990. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Discussion Papers 934, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Nelson, Richard R. & Pack, Howard, 1998.
"The Asian miracle and modern growth theory,"
Policy Research Working Paper Series
1881, The World Bank.
- Hausmann, Ricardo & Rodrik, Dani, 2002.
"Economic Development as Self Discovery,"
CEPR Discussion Papers
3356, C.E.P.R. Discussion Papers.
- Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self-Discovery," Working Paper Series rwp02-023, Harvard University, John F. Kennedy School of Government.
- Ricardo Hausmann & Dani Rodrik, 2002. "Economic Development as Self-Discovery," NBER Working Papers 8952, National Bureau of Economic Research, Inc.
- Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
- W. Baumol, 2001.
"What Marshall Didn't Know: On the Twentieth Century's Contributions to Economics,"
N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 2.
- WIlliam J. Baumol, 2000. "What Marshall Didn'T Know: On The Twentieth Century'S Contributions To Economics," The Quarterly Journal of Economics, MIT Press, vol. 115(1), pages 1-44, February.
- Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1988.
"Industrialization and the Big Push,"
NBER Working Papers
2708, National Bureau of Economic Research, Inc.
- Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August.
- Barbara J. Spencer & James A. Brander, 1983.
"International R&D Rivalry and Industrial Strategy,"
NBER Working Papers
1192, National Bureau of Economic Research, Inc.
- Spencer, Barbara J & Brander, James A, 1983. "International R & D Rivalry and Industrial Strategy," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 707-22, October.
- Dani Rodrik, 2003.
NBER Working Papers
10050, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Simon Johnson & James A. Robinson, 2000.
"The Colonial Origins of Comparative Development: An Empirical Investigation,"
NBER Working Papers
7771, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
- Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64 National Bureau of Economic Research, Inc.
- Rodrik, Dani, 1996. "Coordination failures and government policy: A model with applications to East Asia and Eastern Europe," Journal of International Economics, Elsevier, vol. 40(1-2), pages 1-22, February.
- Daniel Berkowitz & Katharina Pistor & Jean-Francois Richard, 2000.
"Economic Development, Legality, and the Transplant Effect,"
CID Working Papers
39, Center for International Development at Harvard University.
- Berkowitz, Daniel & Pistor, Katharina & Richard, Jean-Francois, 2003. "Economic development, legality, and the transplant effect," European Economic Review, Elsevier, vol. 47(1), pages 165-195, February.
- Daniel Berkowitz & Katharina Pistor & Jean-Francois Richard, 2000. "Economic Development, Legality, and the Transplant Effect," William Davidson Institute Working Papers Series 308, William Davidson Institute at the University of Michigan.
- Daniel Berkowitz & Karina Pistor & Jean-Francois Richard, 2001. "Economic Development, Legality, and the Transplant Effect," William Davidson Institute Working Papers Series 410, William Davidson Institute at the University of Michigan.
- Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May.
- Pack, Howard & Westphal, Larry E., 1986. "Industrial strategy and technological change : Theory versus reality," Journal of Development Economics, Elsevier, vol. 22(1), pages 87-128, June.
- Itoh, Motoshige & Kiyono, Kazuharu, 1987. "Welfare-Enhancing Export Subsidies," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 115-37, February.
- Friedman, Eric & Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 2000. "Dodging the grabbing hand: the determinants of unofficial activity in 69 countries," Journal of Public Economics, Elsevier, vol. 76(3), pages 459-493, June.
- Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
- Matsuyama, K., 1992. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Working Papers e-92-3, Hoover Institution, Stanford University.
- Pessoa, Argentino, 2012. "Regional cluster policy: The Asian model vs. the OECD approach," MPRA Paper 42024, University Library of Munich, Germany.
- Argentino Pessoa, 2008. "Tourism and Regional Competitiveness: the Case of the Portuguese Douro Valley," FEP Working Papers 299, Universidade do Porto, Faculdade de Economia do Porto.
- Pessoa, Argentino, 2008. "Natural resources and institutions: the “natural resources curse” revisited," MPRA Paper 8640, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier).
If references are entirely missing, you can add them using this form.