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Determinants of Economic Growth Across Embedded Economies: A Transformational Analogy of Mining Population for Human Capital

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  • Voxi Heinrich S. Amavilah

Abstract

Emerging evidence shows a strong correlation between institutions and economic growth, and explains the recent research shift from focus on resources and resource productivity to institutions as determinants of economic growth. The positive correlation is read by some as indication that economies with similar institutions should perform approximately the same, and by extension embedded economies should perform like their host(s). However, observation shows that some embedded economies, such as some U.S. Native economies, perform worse than their host(s) sometimes. There are two reasons for the difference: (a) host-embedded interactions are weak; and (b) the institutions of embedded- and host economies are similar only at the infrastructure level, but very dissimilar at the supestructure level. Within general host economies infrastructural and supperstructural elements of institutions work together to stimulate and sustain economic growth, while within embedded economies they may pull in opposing directions thereby slowing, preventing, or even reversing economic growth. This paper first sets up a practical model of host-embedded interactions assumed to take place via the states of the host economy (Yj) and technology (Aj) - both of which affect local production (Yi), where Yj affects Yi directly and Aj affects Yi indirectly through human capital. Second, the paper introduces geo-engineering quantity-quality models that would allow assessment of the separate effects on the growth of embedded economies of infrastructural and superstructural aspects of institutions. An obvious weakness of the paper is that it leaves empirical estimations and tests for a separate study.

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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0402001.

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Length: 21 pages
Date of creation: 03 Feb 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0402001

Note: Type of Document - word perfect doc; prepared on WinXP; pages: 21; figures: None. Author invites comments and criticisms
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Web page: http://128.118.178.162

Related research

Keywords: growth embedded economies; mining population for human capital; deteminants of growth;

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Cited by:
  1. Voxi Heinrich Amavilah, 2005. "Solow and the Native Americans: Technological Residuals and the Economic Performance of U.S. Native American Economies," Development and Comp Systems, EconWPA 0505008, EconWPA.
  2. Voxi Heinrich S Amavilah, 2004. "Economic Performance in a Cross-Section of U.S. Native American Economies," GE, Growth, Math methods, EconWPA 0405003, EconWPA.
  3. Voxi Heinrich Amavilah, 2004. "Apparent Solow- and Solow-like Technological Residuals and the Economic Performance of U.S. Native American Economies," Development and Comp Systems, EconWPA 0406004, EconWPA.
  4. Voxi Heinrich S Amavilah, 2005. "Human Capital and Income across U.S. Native American Reservations and Trust Lands," GE, Growth, Math methods, EconWPA 0505001, EconWPA.

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