Political Instability and Economic Growth: Implications of Coup Events in Sub-Saharan Africa

The study examines the differential roles of various elite political instability (PI) events—successful coups d'etat, abortive coups, or coup plots—in the growth of Sub-Saharan Africa. It analyzes World Bank economic statistics and data on the incidence of coups d'etat for 31 countries in a cross-country augmented production function framework that incorporates PI events as well as labor and capital as arguments. It finds that abortive coups, rather than successful coups, had the greatest adverse impact on economic growth over the 1960–1986 period. Coup plots were also observed to be growth-inhibiting. This deleterious "direct" effect of PI is observed to be channeled via the deterioration in the marginal productivity of capital, regardless of coup event. While abortive coups negatively influenced economic growth monotonically, however, the impacts of successful coups and coup plots appeared to be non-monotonic: negative generally but positive at very low levels of investment.     

National Values and Economic Growth

A bstract    Using data on economic values and attitudes for various nations from the World Value Study, I show that the strength of values associated with market success does not appear to have a significant impact on the rate of economic growth in a sample of developing and developed market economies. I also show that such values do not seem related to the economic system and have an ambiguous relation to the overall level of economic development. These negative results suggest that, contrary to common belief, knowledge about such values does not seem very useful in helping us understand economic growth or differences in levels of economic development or economic systems in various countries.     

A SURVEY OF RECENT DEVELOPMENTS IN THE LITERATURE OF FINANCE AND GROWTH

Abstract.  This paper provides a survey of the recent progress in the literature of financial development and economic growth. The survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables. Although the positive role of finance on growth has become a stylized fact, there are some methodological reservations about the results from these empirical studies. Several key issues unresolved in the literature are highlighted. The paper also points to several directions for future research.     

The Global System of Finance

A bstract .   In the last decades, revolutionary changes in financial markets, instruments, and institutions have stimulated empirical and theoretical investigations into the interaction of the financial and the "real" side of economic systems. While a considerable body of empirical investigations seems to provide evidence of positive correlations between stock market development and economic growth, there is no consensus in other social sciences as to whether there are two-way linkages, and if so, how to conceive a possible mechanism of interaction. Particularly, the hypergrowth and ubiquity of financial markets has triggered controversial debates on how to understand today's economic landscape. With the objective of clarifying the relationship between finance and economy, this article restructures the present debate through the lenses of Talcott Parsons's and Niklas Luhmann's theories of social systems. Basic system-theoretical ideas on social aspects of finance and economy as well as on uncertainty and risk hint at new insights into the global system of finance that might go far beyond explanatory models of causality.     

Learning to be Sociable: The Evolution of Homo Economicus

A bstract .   This article studies the evolution of the economic man ( Homo economicus ) from its original conception until the current day. By analyzing the discourse of economic articles, we provide a chronological account of the economic man's intellectual and philosophical development as it evolved from what we term the philosophical age to the neoclassical age and finally to the strategic age. The article then shows how the economic man in the strategic age is slowly finding convergence with the sociological man ( Homo sociologicus ). A reconciliation of the two sapiens is difficult. However, recent papers on behavioral and experimental economics provide insights into a possible reconciliation. Our study argues that the purpose of the sociological man is to identify who he is, how he interacts with people within a society, and the antecedents to such behaviors. Homo economicus, however, has no overarching philosophical assumptions on what he values. The objectives of each discipline are different and, once one is mapped onto the other, it is unclear if there is truly any tension between them.     

Does Political Democracy Enhance Human Development in Developing Countries?

A bstract .   Despite the considerable progress of human development (HD) in developing countries (DCs) during recent decades, vast differences still remain among such countries. The question thus arises of why these divergences persist. This cross-national study uses a larger sample of DCs to offer necessary testing of the impact of democracy on HD. This study adopts new measures of democracy featuring majority rule and political contention to estimate their correlation with three physical well-being indicators as well as with three school enrollment indicators. After controlling for several macro-level political and economic characteristics (state revenue and economic growth), the regression modeling for recent data from the 1980s and 1990s showed that democracies indeed achieved higher levels on the HD indicators used here. However, democracy was not a powerful predictor of changes in HD scores during the analysis period. Neither central government health or educational spending significantly altered HD. The conclusions offer a plausible explanation of why democracy in DCs failed to sustain its momentum in improving HD.     

Do Casinos Cause Economic Growth?

A bstract .   Casino gambling is a popular form of entertainment and is purported to have positive effects on host economies. The industry surely affects local labor markets and tax revenues. However, there has been little evidence on the effects of casino gambling on state economic growth. This paper examines that relationship using Granger-causality analysis modified for use with panel data. Our results indicate that there is no Granger-causal relationship between real casino revenues and real per capita income at the state level. The results are based on annual data from 1991 to 2005. These findings contradict an earlier study that found that casino revenues Granger-cause economic growth, using quarterly data from 1991 to 1996. Possible explanations for the differences in short- and long-run effects are discussed.     

Financial Markets, Development and Economic Growth: Tales of Informational Asymmetries

Abstract.  The development of financial systems is very often characterised by the development of innovative financial contracts which allow a more efficient allocation of resources and a higher level of capital productivity and economic growth. By exploiting the microeconomic theory of the optimal financial contract under asymmetric information, economists have recently managed to shed new light on the well studied issue of the relationship between financial market development and economic growth. This paper reviews the most recent progress of this literature which shows that the amount of information asymmetry in the credit market and the degree of heterogeneity between borrowers (typically firms) and lenders (typically workers or savers) determine the nature of the financial system. Differences in endowments and in the level of information distribution can give rise to very different financial contracts which affect, and in turn are affected, by capital accumulation and growth.     

金融发展、FDI技术溢出与中国经济增长——基于省际面板数据的实证分析

基于1990年-2008年中国省际面板数据,就金融发展水平决定的FDI溢出效应对中国经济增长影响的实证研究表明,样本期内FDI通过其资本积累效应,对中国经济增长产生了显著的促进作用,且这一作用有随时间而强化的趋势;金融发展具有放大FDI技术溢出效应的作用,并由此对中国经济增长产生正面影响,但目前来看这一影响还比较小;"金融抑制"现象依然存在并对中国经济增长产生了不利影响,但在经历了多年的金融体制改革之后,"金融抑制"现象已有所减轻,其对经济增长的负面影响趋于减弱。     

Increasing the Role of Environmental Taxes and Charges as a Policy Instrument in Developing Countries

A bstract .   The judicious use of natural resources is a crucial prerequisite for sustainable growth not just in developed countries but even more so in the third world. More generally, natural resource use is determined to a substantial degree by the tax structure governing a country's economic activity. When a tax constitution can be designed that stimulates the judicious use of natural resources, an important step toward achieving sustainable growth has been made. Designing such a constitution is not a simple task, however. For third-world countries, the task is further complicated by at least three factors. First, the tax system has to be exceedingly simple, since both number and quality of tax instruments available to third-world governments tend to be limited. Second, the legal system tends to mirror the state of economic development. This limits not only the tax structure an economy can bear; it also limits a government's ability to regulate natural resource use by legal means. Third, the more elaborate a legal system, the more diversity it affords its country for economic activity, including opportunities for the division of labor, that is, international competition and trade.     

Publication Bias in the Economic Freedom and Economic Growth Literature

Abstract.  The impact of institutions on economic performance has attracted significant attention from researchers, as well as from policy reformers. A rapidly growing area in this literature is the impact of economic freedom on economic growth. The aim of this paper was to explore publication bias in this literature by means of traditional funnel plots, meta‐significance testing, as well as by bootstrapping these meta‐significance tests. When all the available estimates are combined and averaged, there seems to be evidence of a genuine and positive economic freedom – economic growth effect. However, it is also shown that the economic freedom – economic growth literature is tainted strongly with publication bias. The existence of publication bias makes it difficult to identify the magnitude of the genuine effect of economic freedom on economic growth. The paper explores the differences between aggregate and disaggregate measures of economic freedom and shows that selection effects are stronger when aggregate measures are used.     

Evaluating the Penetration of Capitalism in Postsocialist Moscow

A bstract .   This article evaluates critically the meta-narrative that capitalism is becoming totalizing and hegemonic. Recently, an emerging corpus of postdevelopment thought has begun to deconstruct this discourse, but only in relation to Western economies and the majority (third) world. To further contribute to this emerging critique, the aim is to analyze the degree to which capitalist economic practices have permeated postsocialist societies through a case study of Moscow. Based on face-to-face interviews with 313 households during 2005/06 concerning their work practices, a relatively shallow penetration of capitalism in this city is identified, with only a minority of households relying on the capitalist economy in particular, and the formal economy more generally, to secure their livelihood. The vast majority of the population is found to depend heavily on an array of noncapitalist economic practices; and capitalist and noncapitalist practices are identified as operating in tandem with, rather than in opposition to, each other. The outcome is a call to refute the universality of capitalist hegemony and to rethink the nature of economic development from a perspective that recognizes the persistence of economic pluralism.     

Leonhard Miksch (1901–1950)

A bstract    German economist Leonhard Miksch's ideas on ordoliberalism have so far received little attention in the history of economic thought. This is surprising, as Miksch provides insights into the debates within the so-called "Freiburg School of Law and Economics" in its early phase and, moreover, gave impulses that were essential to the further development of this economic approach. In addition, as a close advisor to Ludwig Erhard, the "political father" of the German "Social Market Economy," his influence on German postwar economic policy was considerable.     

Financial development and economic growth in Vietnam

By making use of a panel dataset that covers 61 provinces of Vietnam over the period 1997 to 2006, this paper examines the link between financial development and economic growth. Our analysis, which is based on endogenous growth theory, reveals that financial development has contributed to economic growth in Vietnam. We find that high ratio of credit to Gross Provincial Product (GPP) has accelerated economic growth in Vietnam. We also found a strong positive link between financial development and economic growth when alternative measures of financial development were used. The impact of foreign direct investment on economic growth will be stronger if more resources are invested in financial market development.     

制度内生化均衡过程和我国经济增长制度有效性检验

本文在制度内生化均衡分析的基础上,构建出经济增长制度内生化决定机制。研究认为当事人资源禀赋和控制权结构决定制度安排和制度结构;一国初始资源禀赋和控制权结构决定宏观政治经济制度,制度内生于经济发展并决定经济增长;当事人拥有资源越多和价值越大,控制权结构和资源禀赋越不平衡,制度和经济将越无法获得有效增长。利用我国1978~2005年时序数据进行Johansen协整检验和Granger因果关系检验,结果显示,控制权结构、制度安排与经济增长存在长期均衡关系,控制权结构决定制度并进而决定经济增长效率。     

Nonlinear relationship between economic growth and nuances of globalisation with income stratification: Roles of financial development and governance

We study the effect of overall globalisation on economic growth in a neoclassical macroeconomic growth model. We further assess our model by considering the decomposed measures of globalisation including economic, political, and social globalisation components. To this end, we estimate panel data models by applying the cross-sectional dependency-autoregressive distributed lags (CS-ARDL) approach to a sample of 116 countries during the available period, 1980–2015. We classified our sample into upper middle-, lower middle-, and high-income groups to minimise country-specific heterogeneity. Our results affirm the presence of a quadratic (nonlinear) U-shaped relationship between the overall globalisation (including the economic, political, social components) and economic growth for the lower middle- and upper middle-income group. However, they provide evidence of a positive linear relationship between globalisation and economic growth for the high-income countries. Given the arguments that the impact of globalisation on growth is conditional on local financial development (FD) and quality of governance (QoG), we incorporate their role. We provide fresh evidence that the impacts of globalisation on economic growth are more profound in the countries with a higher QoG and a higher deepening of FD. We further check the robustness of our analysis applying the U test and dynamic generalised methods of moment approach. We also provide policy implications.     

The Pelagian Controversy: An Economic Analysis

A bstract .   In recent years economic theory has been used to analyze the introduction of new religious doctrines as innovations that further the objectives of religious organizations and their leaders. The present study analyzes the decision of church authorities in the early fifth century to reject the doctrine advanced by Pelagius in favor of the position taken by Augustine. Accounts of the controversy reveal two self-interested motives for the church hierarchy to reject the Pelagian doctrine: (1) the Pelagian view would have undermined the authority of the church hierarchy; and (2) by making greater demands for moral conduct, it would have raised the "cost" of being a Christian and thereby discouraged growth in church membership, particularly among the Roman upper class.     

Market‐oriented institutions and policies and economic growth: A critical survey

Abstract.  This paper surveys recent evidence suggesting that market‐oriented institutions and policies are strongly related to economic growth, focusing on studies using the economic freedom (EF) indicator of the Fraser Institute. This index is critically discussed. Also various serious shortcomings of empirical studies using this index are identified. Nevertheless, there are strong indications that liberalization, i.e. an increase in the EF index, stimulates economic growth. This paper also reviews studies on the determinants of EF. Political liberalization is often found to enhance economic liberalization, whereas there is less evidence for causality running in the other direction.     

The linkages among energy consumption,economic growth,relative price,foreign direct investment,and financial development in Malaysia

The aim of this study is to analyse the causal relationship among energy consumption, economic growth, relative price, financial development (FD) and foreign direct investment in Malaysia using a multivariate framework. This study covers a sample from 1972 to 2009. Both the Johansen–Juselius cointegration test and bounds testing approach to cointegration consistently suggest that the variables are cointegrated. We find that energy consumption and economic growth Granger causes each other in the short and long run. In addition, both FDI-led growth and finance-led growth hypotheses are also supported by the findings from this study. Ultimately, energy is a prominent resource for financial sector development in Malaysia because we find that energy consumption Granger causes FD. Policymakers should implement a dual strategy that, on one hand, increases investment in energy infrastructure to ensure that the supply of energy is sufficient for the financial sector and economic development, while, on the other, encourages R&D in green technology such as exercising proper soil conservation techniques and sustainable farming practices in order to reduce the consumption of fossil fuels. By doing so, environmental problems such as carbon dioxide emissions can be minimised without affecting economic growth and financial sector development in Malaysia.     

Financial development,portfolio investments and the real economy in Africa

According to the conservative view, capital flows enhance economic growth. Focussing on Africa’s real economy, this study investigates the linkage between portfolio investments and real sector growth, and whether financial sector development strengthens this association. The study covers 30 countries over the period 1990–2017. We adopt the Lewbel instrumental variable general method of moments (IV-GMM) two-step robust estimator, which relies on heteroscedasticity for identification, while dealing with instrument insufficiency, unavailability, endogeneity and omitted variable bias. We found that portfolio equity has no growth impact on Africa’s real sector. Debt flows deter the growth of the overall real sector as well as the manufacturing and industrial sectors, but have no impact on agriculture and service growth. We found that financial development does strengthen the positive association between capital flows and economic growth, but this is dependent on the type of sector and portfolio investment, as well as on the degree of financial development. We control for known determinants of economic growth.