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Governance, Economic Growth and Development since the 1960s

Author

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  • Mushtaq H. Khan

Abstract

Liberal economists have developed a framework of good governance as market-enhancing governance, focusing on governance capabilities that reduce transaction costs and enable markets to work more efficiently. In contrast, heterodox economists have stressed the role of growth-enhancing governance, which focuses on governance capacities to overcome entrenched market failures in allocating assets, acquiring productivity-enhancing technologies and maintaining political stability in contexts of rapid social transformation. The two are not necessarily mutually exclusive, but current policy exclusively focuses on the former, and ignores the strong empirical and historical evidence supporting the latter to the detriment of the growth prospects of poor countries.

Suggested Citation

  • Mushtaq H. Khan, 2007. "Governance, Economic Growth and Development since the 1960s," Working Papers 54, United Nations, Department of Economics and Social Affairs.
  • Handle: RePEc:une:wpaper:54
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    File URL: http://www.un.org/esa/desa/papers/2007/wp54_2007.pdf
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    References listed on IDEAS

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    1. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    2. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    3. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    4. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    5. Keefer, Philip & Knack, Stephen, 1997. "Why Don't Poor Countries Catch Up? A Cross-National Test of Institutional Explanation," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 590-602, July.
    6. Author-Name: Jeffrey D. Sachs & John W. McArthur & Guido Schmidt-Traub & Margaret Kruk & Chandrika Bahadur & Michael Faye & Gordon McCord, 2004. "Ending Africa's Poverty Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 117-240.
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    Citations

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    Cited by:

    1. Md Rafayet Alam & Erick Kitenge & Bizuayehu Bedane, 2017. "Government Effectiveness and Economic Growth," Economics Bulletin, AccessEcon, vol. 37(1), pages 222-227.
    2. Amavilah, Voxi & Asongu, Simplice A. & Andrés, Antonio R., 2017. "Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 91-103.
    3. repec:gam:jecomi:v:6:y:2018:i:1:p:2-:d:125115 is not listed on IDEAS
    4. Lant Pritchett & Erik Werker, 2012. "Developing the guts of a GUT (Grand Unified Theory): elite commitment and inclusive growth," Brooks World Poverty Institute Working Paper Series esid-016-12, BWPI, The University of Manchester.
    5. Ali Muhammad & Abiodun Egbetokun & Manzoor Hussain Memon, 2015. "Human Capital and Economic Growth: The Role of Governance," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 529-549.
    6. Rachid Mira, 2017. "Institutions et ordre politique dans le modèle économique algérien," CEPN Working Papers hal-01593281, HAL.
    7. Baskaran, Thushyanthan & Bigsten, Arne, 2013. "Fiscal Capacity and the Quality of Government in Sub-Saharan Africa," World Development, Elsevier, vol. 45(C), pages 92-107.
    8. Muhammad Ali & Abiodun Egbetokun & Manzoor Hussain Memon, 2018. "Human Capital, Social Capabilities and Economic Growth," Economies, MDPI, Open Access Journal, vol. 6(1), pages 1-18, January.
    9. Rachid Mira, 2017. "Institutions et ordre politique dans le modèle économique algérien," CEPN Working Papers 2017-11, Centre d'Economie de l'Université de Paris Nord.
    10. repec:gam:jsusta:v:10:y:2018:i:2:p:502-:d:131775 is not listed on IDEAS

    More about this item

    Keywords

    governance; market failures; transaction costs;

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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