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322
Finance and growth: Theory and evidence
, 2004
"... This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermedia ..."
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Cited by 489 (23 self)
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This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development influences economic growth. The paper highlights many areas needing additional research.
INSTITUTIONS DON’T RULE: DIRECT EFFECTS OF GEOGRAPHY ON PER CAPITA INCOME
, 2003
"... In a series of papers, my colleagues and I have demonstrated that levels of per capita income, economic growth, and other economic and demographic dimensions are strongly correlated with geographical and ecological variables such as climate zone, disease ecology, and distance from the coast. Three r ..."
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Cited by 212 (2 self)
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In a series of papers, my colleagues and I have demonstrated that levels of per capita income, economic growth, and other economic and demographic dimensions are strongly correlated with geographical and ecological variables such as climate zone, disease ecology, and distance from the coast. Three recent papers purport to show that the role of geography in explaining cross-country patterns of income per capita operates predominantly or exclusively through the choice of institutions, with little direct effect of geography on income after controlling for the quality institutions. This note shows that malaria transmission, which is strongly affected by ecological conditions, directly affects the level of per capita income after controlling for the quality of institutions.
2004): On the empirics of foreign aid and growth
- Economic Journal
"... The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run pro-ductivity. The size and direction of the impact may depend on policies, ‘deep ’ structural characteristics and the siz ..."
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Cited by 141 (8 self)
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The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run pro-ductivity. The size and direction of the impact may depend on policies, ‘deep ’ structural characteristics and the size of the inflow. The empirical analysis investigates these possibi-lities. Overall we find that aid has been effective in spurring growth, but the magnitude of the effect depends on climate-related circumstances. Finally, we argue that the Collier-Dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate. The usefulness of foreign aid in promoting growth in developing countries has been an area of controversy ever since Rosenstein-Rodan in 1943 advocated for aid to Eastern and South-Eastern Europe. Browsing through successive editions of a leading textbook in development economics provides a telling illustration of how the confidence in aid effectiveness dwindled over the years. In the first edition of ‘Leading Issues in Economic Development’, Meier (1964) dedicated a full 18-page section to the issue of foreign aid. He started out asking: ‘How much aid?’. By the
The death toll from natural disasters: the role of income, geography and institutions
- Review of Economics and Statistics
, 2005
"... Using a new data set on annual deaths from disasters in 57 nations from 1980 to 2002, this paper tests several hypotheses concerning natural disaster mitigation. While richer nations do not experience fewer natural disaster events than poorer nations, richer nations do suffer less death from disaste ..."
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Cited by 134 (2 self)
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Using a new data set on annual deaths from disasters in 57 nations from 1980 to 2002, this paper tests several hypotheses concerning natural disaster mitigation. While richer nations do not experience fewer natural disaster events than poorer nations, richer nations do suffer less death from disaster. Economic development provides implicit insurance against nature’s shocks. Democracies and nations with higher quality institutions suffer less death from natural disaster. The results are relevant for judging the incidence of a Global Warming induced increase in the count of natural disaster shocks.
2003), Law and finance: why does legal origin matter
- Journal of Comparative Economics
"... Abstract: New research suggests that cross-country differences in legal origin help explain differences in financial development. This paper empirically assesses two theories of why legal origin influences financial development. First, the “political ” channel stresses that (i) legal traditions diff ..."
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Cited by 88 (5 self)
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Abstract: New research suggests that cross-country differences in legal origin help explain differences in financial development. This paper empirically assesses two theories of why legal origin influences financial development. First, the “political ” channel stresses that (i) legal traditions differ in the priority they give to the rights of individual investors vis-à-vis the state and (ii) this has repercussions for the development of property rights and financial markets. Second, the “adaptability ” channel holds that (i) legal traditions differ in their ability to adjust to changing commercial circumstances and (ii) legal systems that adapt quickly to minimize the gap between the contracting needs of the economy and the legal system’s capabilities will foster financial development more effectively than would more rigid legal traditions. We use historical comparisons and cross-country regressions to assess the validity of these two channels. We find that legal origin matters for financial development because legal traditions differ in their ability to adapt efficiently to evolving economic conditions.
Regulations, market structure, institutions and the cost of financial intermediation
- Journal of Money, Credit and Banking
, 2004
"... Federal Reserve Bank, and an anonymous referee for very helpful discussions and comments. This paper’s findings, interpretations, and conclusions are entirely those of the authors and do not necessarily represent the views of the ..."
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Cited by 83 (12 self)
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Federal Reserve Bank, and an anonymous referee for very helpful discussions and comments. This paper’s findings, interpretations, and conclusions are entirely those of the authors and do not necessarily represent the views of the
Udry (2005), The Profits of Power: Land Rights and Agricultural Investment in
"... We examine the impact of ambiguous and contested land rights on investment and productivity in agriculture in Akwapim, Ghana. We show that individuals who hold powerful positions in a local political hierarchy have more secure tenure rights, and that as a consequence they invest more in land fertili ..."
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Cited by 82 (7 self)
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We examine the impact of ambiguous and contested land rights on investment and productivity in agriculture in Akwapim, Ghana. We show that individuals who hold powerful positions in a local political hierarchy have more secure tenure rights, and that as a consequence they invest more in land fertility and have substantially higher output. The intensity of investments on di¤erent plots cultivated by a given individual correspond to that individual’s security of tenure over those speci…c plots and, in turn, to the individual’s position in the political hierarchy relevant to those speci…c plots.
Growth Strategies
, 2003
"... This is an attempt to derive broad, strategic lessons from the diverse experience with economic growth in last fifty years. The paper revolves around two key arguments. One is that neoclassical economic analysis is a lot more flexible than its practitioners in the policy domain have generally given ..."
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Cited by 77 (1 self)
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This is an attempt to derive broad, strategic lessons from the diverse experience with economic growth in last fifty years. The paper revolves around two key arguments. One is that neoclassical economic analysis is a lot more flexible than its practitioners in the policy domain have generally given it credit. In particular, first-order economic principles—protection of property rights, market-based competition, appropriate incentives, sound money, and so on—do not map into unique policy packages. Reformers have substantial room for creatively packaging these principles into institutional designs that are sensitive to local opportunities and constraints. Successful countries are those that have used this room wisely. The second argument is that igniting economic growth and sustaining it are somewhat different enterprises. The former generally requires a limited range of (often unconventional) reforms that need not overly tax the institutional capacity of the economy. The latter challenge is in many ways harder, as it requires constructing over the longer term a sound institutional underpinning to endow the economy with resilience to shocks and maintain productive dynamism. Ignoring the distinction between these two tasks leaves reformers saddled with impossibly ambitious, undifferentiated, and impractical policy agendas.
The New Comparative Economics
, 2003
"... In recent years, comparative economics experienced a revival, with a new focus on comparing capitalist economies. The theme of the new research is that institutions exert a profound influence on economic development. We argue that, to understand capitalist institutions, one needs to understand th ..."
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Cited by 76 (0 self)
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In recent years, comparative economics experienced a revival, with a new focus on comparing capitalist economies. The theme of the new research is that institutions exert a profound influence on economic development. We argue that, to understand capitalist institutions, one needs to understand the basic tradeoff between the costs of disorder and those of dictatorship. We then apply this logic to study the structure of efficient institutions, the consequences of colonial transplantation, and the politics of institutional choice.
Natural Resources: Curse or Blessing
- Journal of Economic Literature
, 2011
"... An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the RePEc website: www.RePEc.org • from the CESifo website: Twww.CESifo-group.org/wp T ..."
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Cited by 72 (1 self)
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An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the RePEc website: www.RePEc.org • from the CESifo website: Twww.CESifo-group.org/wp T
