We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

Poverty and Famines: An Essay on Entitlement and Deprivation

Corruption and Growth

This paper describes the correlations between inequality and the growth rates in cross-country data. Using non-parametric methods, we show that the growth rate is an inverted U-shaped function of net changes in inequality: Changes in inequality (in any direction) are associated with reduced growth in the next period. The estimated relationship is robust to variations in control variables and estimation methods. This inverted U-curve is consistent with a simple political economy model, although, as we point out, efforts to interpret this model causally run into difficult identification problems. We show that this non-linearity is sufficient to explain why previous estimates of the relationship between the level of inequality and growth are so different from one another.

Inequality and Growth: What Can the Data Say?

Rodriguez-Pose A. Do institutions matter for regional development?, Regional Studies. This paper discusses whether institutions matter for regional development and how to integrate them in regional development strategies. It is found that while institutions are crucial for economic development, generating an institution-based regional development strategy is likely to be undermined by the lack of definition of what are efficient institutions. Problems related to the measurement of institutions, to their space and time variability, to the difficulties in establishing the right mix of formal and informal institutions, and to the endogeneity between institutions and economic development make one-size-fits-all approaches to operationalizing institutions difficult. The paper posits that, in order to overcome these problems, it is crucial to distinguish between the ‘institutional environment’ and ‘institutional arrangements’, that is, to target not the institutions which shape the unique character of any territ...

Do Institutions Matter for Regional Development

This paper considers the effects of corruption and government spending on economic growth. It starts from an endogenous growth model and extends it to account for the detrimental effects of corruption on the potentially productive components of government spending, namely military and investment spending. The resulting model is estimated on a sample of African countries and the results show, first, that the growth rate is strongly influenced by the interaction between corruption and military burden, with the interaction between corruption and government investment expenditure having a weaker effect. Second, allowing for the cyclical economic fluctuations in specific countries leaves the estimated elasticities close to those of the full sample. Third, there are significant conditioning variables that need to be taken into account, namely the form of government, political instability and natural resource endowment. These illustrate the cross country heterogeneity when accounting for quantitative direct and indirect effects of key variables on economic growth. Overall, these findings suggest important policy implications.

Government spending, corruption and economic growth

Corruption and growth in Africa

https://mpra.ub.uni-muenchen.de/23579/1/draft.pdf

Corruption and the effects of economic freedom

This paper considers the effect of corruption and military spending on economic growth, analysing both the direct impact of public spending and the effect of allocating resources between categories of public spending within the framework of an endogenous growth model The model exhibits non-linearities as a result of the links between the components of public spending, corruption and economic growth The main findings of the empirical analysis confirm the expectation that corruption and military burden lower the growth rate of gross domestic product per capita They also suggest that when the effect of the complementarity between military spending and corruption is omitted, as in most studies, the impact of military burden on economic performance is underestimated

Giorgio d'Agostino

Papers

Government spending, corruption and economic growth

Government spending, corruption and economic growth

Corruption and growth in Africa

Corruption and the effects of economic freedom

Corruption, military spending and growth