世界経済・社会統計 = World development indicators

Output per worker varies enormously across countries. Why? On an accounting basis, our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker--we find a large amount of variation in the level of the Solow residual across countries. At a deeper level, we document that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which we call social infrastructure. We treat social infrastructure as endogenous, determined historically by location and other factors captured in part by language.

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Why Do Some Countries Produce so Much More Output Per Worker than Others

This paper analyzes a newly assembled data set consisting of subjective indices of corruption, the amount of red tape, the efficiency of the judicial system, and various categories of political stability for a cross section of countries. Corruption is found to lower investment, thereby lowering economic growth. The results are robust to controlling for endogeneity by using an index of ethnolinguistic fractionalization as an instrument.

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Corruption and Growth

https://link.springer.com/content/pdf/10.2307%2F3343168.pdf

Development as Freedom

Does finance affect economic growth? A number of studies have identified a positive correlation between the level of development of a country's financial sector and the rate of growth of its per capita income. As has been noted elsewhere, the observed correlation does not necessarily imply a causal relationship. This paper examines whether financial development facilitates economic growth by scrutinizing one rationale for such a relationship; that financial development reduces the costs of external finance to firms. Specifically, we ask whether industrial sectors that are relatively more in need of external finance develop disproportionately faster in countries with more developed financial markets. We find this to be true in a large sample of countries over the 1980s. We show this result is unlikely to be driven by omitted variables, outliers, or reverse causality.

/pdf/financial-dependence-and-growth-2meheeba1z.pdf

Financial Dependence and Growth

Although a large literature argues that European settlement outside of Europe shaped institutional, educational, technological, cultural, and economic outcomes, researchers have been unable to directly assess these predictions because of an absence of data on colonial European settlement In this paper, we construct a new database on the European share of the population during colonization and examine its association with the level of economic development today We find: (1) a strong and uniformly positive relationship between colonial European settlement and development, (2) a stronger relationship between colonial European settlement and economic development today than between development today and the proportion of the population of European descent today; and (3) no evidence that the positive relationship between colonial European settlement and economic development diminishes or becomes negative at very low levels of colonial European settlement, contradicting a large literature that focuses on the enduring adverse effects of small European settlements creating extractive institutions The most plausible explanation of our findings is that any adverse effect of extractive institutions associated with minority European settlement was more than offset by other things the European settlers brought with them, such as human capital and technology

The European Origins of Economic Development

Does economic development depend on geographic endowments like temperate instead of tropical location, the ecological conditions shaping diseases, or an environment good for grains or certain cash crops? Or do these endowments of tropics, germs, and crops affect economic development only through institutions or policies? We test the endowment, institution, and policy views against each other using cross country evidence. We find evidence that tropics, germs, and crops affect development through institutions. We find no evidence that tropics, germs, and crops affect country incomes directly other than through institutions, nor do we find any effect of policies on development once we control for institutions.

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Tropics, Germs, and Crops: How Endowments Influence Economic Development

In the new millennium, the Western aid effort toward Africa has surged due to writ- ings by well-known economists, a celebrity mass advocacy campaign, and decisions by Western leaders to make Africa a major foreign policy priority. This survey contrasts the predominant "transformational" approach (West comprehensively saves Africa) to occasional swings to a "marginal" approach (West takes one small step at a time to help individual Africans). Evaluation of "one step at a time" initiatives is generally easier than that of transformational ones either through controlled experiments (although these have been oversold) or simple case studies where it is easier to attribute outcomes to actions. We see two themes emerge from the literature survey: (1) escalation—as each successive Western transformational effort has yielded disappointing results (as judged at least by stylized facts, since again the econometrics are shaky), the response has been to try an even more ambitious effort and (2) the cycle of ideas—rather than a progressive testing and discarding of failed ideas, we see a cycle in aid ideas in many areas in Africa, with ideas going out of fashion only to come back again later after some lapse long enough to forget the previous disappointing experience. Both escalation and cyclicality of ideas are symptomatic of the lack of learning that seems to be characteristic of the "transfor- mational" approach. In contrast, the "marginal" approach has had some successes in improving the well-being of individual Africans, such as the dramatic fall in mortality.

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Can the West Save Africa

One of the central predictions of growth theory, old and new, is that income taxes have a negative effect on the pace of economic expansion. Little empirical work has been done on the topic because of the difficulty of measuring the relevant marginal tax rates. Easterly and Rebelo experiment with a method for computing average marginal income tax rates that combines information on statutory rates with the amount of tax revenue collected and with data on income distribution. Their method relies heavily on the assumption that the marginal tax schedule has a logistic form. Their method stands a better chance of measuring the relevant average marginal tax rate than the widely used alternative of assuming (implicitly or explicitly) that the income tax is proportional. The possibility of estimating marginal income tax rates suggests two lines of research: a study of the properties of models with nonlinear income taxes and a search for adequate empirical strategies for testing those models with cross-country data.

Marginal income tax rates and economic growth in developing countries

Aid does not necessarily finance investment, and investment does not necessarily promote growth. But the combination of private investment, good policies, and foreign aid is quite powerful. When societies themselves take the lead in putting growth-enhancing policies in place, foreign aid can play a powerful supporting role, bringing ideas, technical assistance, and money. Dollar and Easterly's study of aid, investment, and policies in Africa leads them to four principal conclusions: ° The traditional links between aid, investment, and growth are not robust. Aid does not necessarily finance investment and investment does not necessarily promote growth. ° Differences in economic policies can explain much of the difference in growth performance. Poor quality of public services, closed trade regimes, financial repression, and macroeconomic mismanagement explain Africa's poor record. ° Foreign aid cannot easily promote lasting policy reform in countries where there is no strong domestic movement in that direction. Country ownership of reform is more important than donor conditionality. ° These three conclusions imply that societies themselves must take the lead in putting growth-enhancing policies in place. When this happens, foreign aid can play a powerful supporting role, bringing ideas, technical assistance, and money. The combination of private investment, good policies, and foreign aid is quite powerful. Where do we stand in the search for the key to growth in Africa? Because past keys to growth in Africa have failed, Dollar and Easterly are cautious about claims to a new key. But even if aid-cum-private-investment-cum-policy reform falls short of being the one and only key to growth, disbursing aid into good policy environments would be an improvement on current practices. This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to examine aid effectiveness. The authors may be contacted at ddollar@worldbank.org or weasterly@worldbank.org.

https://papers.ssrn.com/sol3/Delivery.cfm/599.pdf?abstractid=615001&mirid=5

William Easterly

Papers

The European Origins of Economic Development

Tropics, Germs, and Crops: How Endowments Influence Economic Development

Can the West Save Africa

Marginal income tax rates and economic growth in developing countries

The Search for the Key: Aid, Investment, and Policies in Africa