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Both Institutions and Policies Matter but Differently for Different Income Groups of Countries: Determinants of Long-Run Economic Growth Revisited

  • Lee, Keun
  • Kim, Byung-Yeon

Summary This paper revisits the recent debate on the determinants of long-run economic growth with the simple idea that different factors matter at different country groups classified by income levels. This paper improves on the methodology by conducting not only cross-section estimations but also fixed-effects panel and system-GMM estimations. The results suggest that new policy variables such as technology and tertiary education, as well as institutions, matter as the determinants of long-run economic growth. In addition, this paper finds that while secondary education and institution turn out to be important for lower-income countries, an emphasis on technology and higher education appears to be effective in generating growth for the upper middle- and high-income countries but not for the lower middle and low-income countries.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 37 (2009)
Issue (Month): 3 (March)
Pages: 533-549

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Handle: RePEc:eee:wdevel:v:37:y:2009:i:3:p:533-549
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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