IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2007-086.html
   My bibliography  Save this paper

Guyana: Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth

Author

Listed:
  • Judith Gold
  • Mr. Ruben V Atoyan
  • Miss Cornelia Staritz

Abstract

After a period of exceptionally strong economic performance, Guyana's growth has stagnated since 1998. The paper tries to identify the factors that can explain this dramatic deterioration in economic performance. The paper first attempts to explain the decline of growth with a growth accounting exercise which shows that there was a significant swing in total factor productivity, and than uses a panel regression framework to analyze the growth impact of changes in various factors. Finally, through a series of cross-country exercises, the paper shows that the primary reasons for the divergence between the economic performance of Guyana and other Caribbean, HIPC, and PRGF-eligible countries in 1998-2004 are a substantial decline in share of net foreign and private domestic investment in GDP, a decline in the labor force, and a less favorable political and institutional environment.

Suggested Citation

  • Judith Gold & Mr. Ruben V Atoyan & Miss Cornelia Staritz, 2007. "Guyana: Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth," IMF Working Papers 2007/086, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/086
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=20622
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mr. Ebrima A Faal, 2003. "Currency Demand, the Underground Economy, and, Tax Evasion—The Case of Guyana," IMF Working Papers 2003/007, International Monetary Fund.
    2. Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 1-6.
    3. Mr. Juan Zalduendo & Ms. Catia Batista, 2004. "Can the IMF's Medium-Term Growth Projections Be Improved?," IMF Working Papers 2004/203, International Monetary Fund.
    4. Ms. Prachi Mishra, 2006. "Emigration and Brain Drain: Evidence From the Caribbean," IMF Working Papers 2006/025, International Monetary Fund.
    5. Mr. Saleh M. Nsouli & Mr. Ruben V Atoyan & Mr. Alex Mourmouras, 2004. "Institutions, Program Implementation, and Macroeconomic Performance," IMF Working Papers 2004/184, International Monetary Fund.
    6. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    7. Ms. Ratna Sahay, 2005. "Stabilization, Debt, and Fiscal Policy in the Caribbean," IMF Working Papers 2005/026, International Monetary Fund.
    8. Mr. William Carrington & Ms. Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 1998/102, International Monetary Fund.
    9. Khan, Mohsin S & Kumar, Manmohan S, 1997. "Public and Private Investment and the Growth Process in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(1), pages 69-88, February.
    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


    Cited by:

    1. Tarron Khemraj, 2016. "The Political Economy of Guyana’s Underdevelopment," The Review of Black Political Economy, Springer;National Economic Association, vol. 43(3), pages 325-342, December.
    2. Pasha, Sukrishnalall, 2020. "The impact of political instability on economic growth: the case of Guyana," MPRA Paper 103145, University Library of Munich, Germany.
    3. Paiva, Pedro Henrique de Abreu & Bacha, Carlos José Caetano, 2019. "The gross domestic product (GDP) shares of the agriculture sector and the hydrocarbon and mining sector in the countries of South America between 1960 and 2014," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    4. Khemraj, Tarron, 2007. "The missing link: the finance-growth nexus and the Guyanese growth stagnation," MPRA Paper 16342, University Library of Munich, Germany.
    5. Khemraj, Tarron & Hinova, Diana, 2011. "Elected Oligarchy and Economic Underdevelopment: The Case of Guyana," MPRA Paper 29733, University Library of Munich, Germany.
    6. Grenade, Kari & Pasha, Sukrishnalall, 2012. "Accelerating Guyana’s Growth Momentum," MPRA Paper 41960, University Library of Munich, Germany.
    7. Constantine, Collin, 2014. "Growth and Distribution: A Guyana Case Study," MPRA Paper 58882, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William Easterly & Ross Levine, 2001. "It's Not Factor Accumulation: Stylized Facts and Growth Models," The World Bank Economic Review, World Bank, vol. 15(2), pages 177-17-219.
    2. James Alm & Abel Embaye, 2013. "Using Dynamic Panel Methods to Estimate Shadow Economies Around the World, 1984-2006," Working Papers 1303, Tulane University, Department of Economics.
    3. Amin Karimu & George Adu & George Marbuah & Justice Tei Mensah & Franklin Amuakwa-Mensah, 2017. "Natural Resource Revenues and Public Investment in Resource-rich Economies in Sub-Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 107-130, November.
    4. Rao, B. Bhaskara & Vadlamannati, Krishna Chaitanya, 2011. "Globalization and growth in the low income African countries with the extreme bounds analysis," Economic Modelling, Elsevier, vol. 28(3), pages 795-805, May.
    5. Amin Karimu & George Adu & George Marbuah & Justice Tei Mensah & Franklin Amuakwa-Mensah, 2017. "Natural Resource Revenues and Public Investment in Resource-rich Economies in Sub-Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 107-130, November.
    6. Gokcen Yilmaz, 2018. "Composition of public investment and economic growth: evidence from Turkish provinces, 1975-2001," Public Sector Economics, Institute of Public Finance, vol. 42(2), pages 187-214.
    7. Antonio Spilimbergo, 2009. "Democracy and Foreign Education," American Economic Review, American Economic Association, vol. 99(1), pages 528-543, March.
    8. Mr. Garbis Iradian, 2007. "Rapid Growth in the CIS: Panel Regression Approach," IMF Working Papers 2007/170, International Monetary Fund.
    9. constantine, collin, 2013. "Why Guyana's self discovery is the missing link in its development strategy," MPRA Paper 44205, University Library of Munich, Germany.
    10. -, 2011. "An assessment of the economic impact of climate change on the transportation sector in Barbados," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38610, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    11. Beine, Michel & Docquier, Frédéric & Oden-Defoort, Cecily, 2011. "A Panel Data Analysis of the Brain Gain," World Development, Elsevier, vol. 39(4), pages 523-532, April.
    12. William Easterly & Ross Levine, 2002. "It´s Not Factor Accumulation: Stylized Facts and Growth Models," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.),Economic Growth: Sources, Trends, and Cycles, edition 1, volume 6, chapter 3, pages 061-114, Central Bank of Chile.
    13. Ahmad, Mahyudin & Marwan, Nur Fakhzan, 2012. "Economic growth and institutions in developing countries: Panel evidence," MPRA Paper 42293, University Library of Munich, Germany.
    14. James Alm & Abel Embaye, 2013. "Using Dynamic Panel Methods to Estimate Shadow Economies Around the World, 1984–2006," Public Finance Review, , vol. 41(5), pages 510-543, September.
    15. Ahmad, Mahyudin & Hall, Stephen G., 2012. "Do institutions matter for growth? Evidence from East Asian countries," MPRA Paper 42158, University Library of Munich, Germany.
    16. E. Tsanana & X. Chapsa & C. Katrakilidis, 2016. "Is growth corrupted or bureaucratic? Panel evidence from the enlarged EU," Applied Economics, Taylor & Francis Journals, vol. 48(33), pages 3131-3147, July.
    17. Md. Rabiul Islam, 2009. "R&D Intensity, Technology Transfer and Absorptive Capacity," Monash Economics Working Papers 13-09, Monash University, Department of Economics.
    18. -, 2011. "An Assessment Of The Economic Impact Of Climate Change On The Transportation Sector In Montserrat," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38608, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    19. Jagannath Mallick, 2013. "Private investment in India: regional patterns and determinants," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 515-536, October.
    20. Embaye, Abel, 2007. "Underground economy estimates for non-OECD countries using currency demand method, 1984-2005," MPRA Paper 20308, University Library of Munich, Germany.

    More about this item

    Keywords

    WP; sub;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2007/086. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.