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on Arab World |
| By: | Philippe Aghion (Harvard University - Department of Economics); Diego Comin (Harvard Business School, Business, Government and the International Economy Unit); Peter Howitt (Brown University - Department of Economics); Isabel Tecu (Brown University - Department of Economics) |
| Abstract: | Can a country grow faster by saving more? We address this question both theoretically and empirically. In our theoretical model, growth results from innovations that allow local sectors to catch up with frontier technology. In poor countries, catching up requires the cooperation of a foreign investor who is familiar with the frontier technology and a domestic entrepreneur who is familiar with local conditions. In such a country, domestic saving matters for innovation, and therefore growth, because it enables the local entrepreneur to put equity into this cooperative venture, which mitigates an agency problem that would otherwise deter the foreign investor from participating. In rich countries, domestic entrepreneurs are already familiar with frontier technology and therefore do not need to attract foreign investment to innovate, so domestic saving does not matter for growth. A cross-country regression shows that lagged savings is positively associated with productivity growth in poor countries but not in rich countries. The same result is found when the regression is run on data generated by a calibrated version of our theoretical model. |
| Keywords: | Savings, growth, technology adoption, TFP, FDI |
| JEL: | E2 O2 O3 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:09-080&r=ara |
| By: | Veiderpass, Ann (Department of Economics, School of Business, Economics and Law, Göteborg University); Andersson, Per-Åke (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Cross country regressions on aid effectiveness have failed to provide substantial evidence on the effects of foreign aid. This study focuses on country performance in a production theory context. By means of the non-parametric DEA method, we study 60 individual low and middle income countries between 1995 and 2000. Is there a systematic correlation between resource intensity and country efficiency? We find indications of a positive relation between capital intensity and country efficiency. We then investigate whether aid is the conclusive part of capital providing this correlation, but when linking country efficiency development to aid, there is no clear pattern to be found.<p> |
| Keywords: | Aid; efficiency; country comparison; production approach |
| JEL: | D24 O57 |
| Date: | 2009–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0333&r=ara |
| By: | Recuero Virto , Laura; Gasmi, Farid; Belaid, Rabah |
| Abstract: | In recent years, a number of studies have shown that institutions are crucial to economic development. This literature has highlighted a relationship between the quality of the macro-institutional environment and the performance of reform policies conducted in some key sectors of the economy. This paper explores this relationship in the context of developing countries for the case of telecommunications, the sector among the infrastructure industries that has experienced worldwide probably the deepest structural changes. We specify an econometric model for a data base of observations on a panel of 32 developing countries covering fifteen years (1985-1999). The sample is decomposed into two panels according to GNP per inhabitant, thus allowing us to test for the existence of a level of revenue below which, once the effect of reforms variables, liberalization and privatization of the incumbent, has been controlled for, the quality of institutions plays only a minor role. We find that the impact of the institutional quality on the performance of the industry is more perceptible in the sample of countries with the lower GNP per inhabitant. Thus, within the developing countries, the marginal effect of an investment in improving the institutional quality is higher in the countries with lower revenues. This result might explain the recent trend of international donors to reallocate resources to long term policies for improving institutional mechanisms as a substitute to shorter-term aid policies focusing on sector-specific governance issues, in particular, in less developed countries. |
| Keywords: | Political accountability; reforms; infrastructure industries; developing countries |
| JEL: | L96 L51 H11 L97 C23 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12889&r=ara |
| By: | Recuero Virto, Laura; Gasmi, Farid; Noumba Um, Paul |
| Abstract: | This paper discusses the relationship between the quality of political and economic institutions and the performance of the infrastructure industries reform process in developing countries. Our point of departure is that, when thinking about this relationship, it is necessary to take into account the specific features of these countries’ economies (Gasmi and Recuero Virto, 2005, Laffont, 2005). Based on two econometric analysis of time-series-crosssectional data on the telecommunications sector, we present the empirical findings and policy implications pertaining two issues (Gasmi et al., 2006, Gasmi and Recuero Virto, 2007). The first issue concerns the impact of the quality of institutions on the performance of regulation. Our review points to the fact that political accountability of institutional systems is a key determinant of regulatory performance. The second issue relates to the factors that shape the sectorial reforms themselves and the impact on these reforms on the development of the industry. Our main conclusion is that countries’ institutional risk and financial constraints are among the major factors that explain which reforms are actually implemented. |
| Keywords: | Political accountability; reforms; infrastructure industries; developing countries |
| JEL: | L96 L51 H11 L97 C23 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12881&r=ara |