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The effectiveness of EU Structural Funds on the economic performance of the receiving countries has been extensively investigated in the last twenty years. The results indicate that the impact of these funds on economic growth is conditional on the quality of the institutions of the receiving countries. In the case of countries with poor institutional quality, the effect of Structural Funds on economic growth will be negative. The reason being, that Structural Funds do affect the allocation of recourses and in countries with poor institutional quality the misallocation of resources might worsen. For example, corruption might divert funds from productive activities; increased opportunities for rent seeking might absorb resources and so on. To the extent that EU Structural Funds have a negative impact on the allocation of resources and growth this might affect the attractiveness of the country as a location for FDI. In this research we investigate the impact of EU Structural Funds on the volume of FDI inflows in EU-15 countries. The econometric analysis is based on a panel analysis of EU-15 countries for the period 1970 – 2005. We utilize a variety of econometric techniques appropriate for this kind of panel data (fixed effects, random effects, OLS and GMM estimators). The results are extremely robust to these alternative specifications. The empirical findings are consistent with the findings of previous studies regarding the determinants of FDI and indicate that the impact of EU Structural Funds on FDI inflows critically depends on the institutional quality of the receiving countries. For countries with high quality institutions the EU Structural Funds have a positive impact on FDI, for countries with low quality institutions the impact will be negative. [ABSTRACT FROM AUTHOR]

This paper proposes a new method for constructing R&D capital stocks developed to avoid the common assumption of a constant rate of knowledge depreciation, which implies wear and tear of knowledge. The method models the development of R&D capital stocks as a process of creative destruction linking the depreciation of knowledge to the emergence of new knowledge. A first empirical assessment of the new method – measuring the influence of R&D capital stocks on production in the manufacturing sectors of 12 OECD countries – produces plausible and robust results. [ABSTRACT FROM AUTHOR]

Copyright of Kyklos is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Kyklos is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Kyklos is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Studies the role of external aid in the economic growth of developing countries. Differences between bilateral and multilateral aid; Comparison of the patterns of constrained and unconstrained estimates on the basis of a model and dataset; Characteristics and conditions of aid; Donor-recipient relations.

Examines reasons why natural resource abundance and extensive agriculture appear to impede economic growth around the world. Cross-sectional evidence of various aspects of the relationship between natural resource abundance and economic growth in the transition economies in Central and Eastern Europe and Central Asia since 1990; Factors resulting from heavy dependence on natural resources.

Discusses the impact of the rate of growth of a country's income on its saving ratio based on several saving theories. Diesenberry-Nurkse relative income theory; Saving behavior of retirees when the economy grows and their incomes increase; Positive variation in a country's personal saving ratio and the rate of increase in the personal income per head.

Examines the argument that happiness causes growth using poll data from the Organization for Economic Co-operation and Development countries. Importance of happiness in preserving decency in society; Positive correlation between trust in people and economic growth; Happiness as a measure of the degree of the overall quality of life.

The purpose of this paper is to answer specifically the question whether one country can model after another with considerable structural differences. First, using Japan's and Korea's time series data, it attempts to identify both the similarities and dissimilarities in economic changes of the two over the past three decades. Second, it introduces into the macromodels some new important factors such as defense spending, social stability and other socio-economic factors which seem to be significant in explaining the differences between the two countries. [ABSTRACT FROM AUTHOR]

This paper confronts the theory of optimal economic growth with present-day growth-criticism as advanced for instance by ecological movements. Especially we analyze optimal growth-paths in the face of satiation (i.e. when wants fall behind the possibilities opened up by technical progress) and in the face of aversion against growth and progress in general, or particularly against the accumulation of machinery. Results about appropriate policies concerning consumption and accumulation as well as working time and technological development are derived. [ABSTRACT FROM AUTHOR]

This paper presents a hypothesis that Japan's rapid economic growth was achieved through a unique combination of neoclassical elements, implying competitiveness and efficiency, and antineoclassical elements, implying growth preference in corporate decisionmakings. First a model of economic growth is presented to establish a theoretical link between management motivation and economic growth, and then industrial organization, internal labor markets, and capital markets in Japan are investigated in comparison to those in the United States in order to substantiate the hypothesis above. We also argue that the faster economic growth in Germany over the United Kingdom can be explained in a similar fashion, and discuss the implications to economic and antitrust policies. [ABSTRACT FROM AUTHOR]

This paper explores the consequences of the introduction of the life-cycle hypothesis into an economic growth model with two classes of savers (profits earners and wage earners). Our analysis shows that the determination of the equilibrium interest rate is more flexible than in the corresponding model with constant propensities to save: the results obtained are however basically similar to those obtained in the traditional KALDOR/PASINETTI model. As a matter of fact, the rate of interest turns out to be (a) higher than the natural rate of growth, (b) determined by the behavioural parameters of the profits earners only, and (c) independent of the form of the production function. Looking at the long term properties of the model we show that interest uncertainty may have a stabilizing effect on the equilibrium growth rate of the model. [ABSTRACT FROM AUTHOR]

The purpose of this is paper is, firstly, to point out that by dropping assumption (b), the original KALDOR model is perfectly consistent and all its results hold, even if both workers and capitalists coexist and own capital in the long-run.
Secondly, to clarify that the assumption of a given capital output ratio made by most authors, and by KALDOR [1956] himself is unnecessary. We argue that any technological relationships between the capital output ratio and the rate of profit is consistent with the KALDOR model.
Finally, to show that in KALDOR'S model there is no 'dual', of the kind found in PASINETTI-like models, by MEADE [1963], SAMUELSON/MODIGLIANI [1966A]. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to study the structure of production in some underdeveloped economies. Recent literature on the problem of economic development has greatly emphasized the role of linkages in the planning of economic development. ALBERT HIRSCHMAN, for example, has advocated a policy of investing in the strategic sectors (those with strong backward and forward linkages) of an economy, which in interacting with the other sectors can help to initiate economic development. An autonomous investment can induce further investments through pressures of excess demand. This is the backward linkage effect -- output of the induced industries are the inputs of the autonomous industry. An autonomous investment can also induce further investment by providing an excess supply of its produce. This is the forward linkage -- the output of the autonomous industry is the input of the induced industries[1]. [ABSTRACT FROM AUTHOR]

Examines the effects of property rights on economic growth. Focus on the ownership of the property; Arbitrary seizure of properties; Significant negative relationship between arbitrary seizure of property and economic growth.

Summary: We explore whether EU membership has led to faster economic growth. Using different estimation strategies, different time periods, different country samples, and different datasets, we are unable to demonstrate the presence of a membership growth premium. This may reflect that GDP data are too noisy and/or causal identification too complicated, in which case we should remain agnostic about the EU's growth impact. Alternatively, it may reflect that EU membership simply has no effect on economic growth. Either way, these findings urge strong caution about one of EU membership's key alleged benefits: greater economic prosperity. [ABSTRACT FROM AUTHOR]

Summary: We examine the impact of labour productivity growth of small and medium‐sized enterprises (SMEs) on labour productivity growth of large firms in a 19‐year panel of 26 European countries. We apply a dynamic panel data model that allows for macro‐level interdependencies in productivity between small and large firms. Our main finding concerns a sizable positive effect of labour productivity increases of SMEs on the productivity of large firms. This positive effect is especially evident for medium‐sized and small firms (rather than micro firms). Furthermore, the impact of SME productivity on large‐firm productivity is increasing with the size of the SME sector. Our analysis indicates that scale effects play a role in the transmission of productivity effects from SMEs to large firms, both in terms of the size of individual SMEs (medium‐sized and small versus micro) and in terms of the share of the SME sector in the economy. [ABSTRACT FROM AUTHOR]

Summary: Bringing together the classic defense of liberty and democracy, the political economy of hierarchy, endogenous growth theory, and the new institutional economics on growth, we propose a new institutional theory that identifies democracy's unique advantage in prompting economic growth. We contend that the channel of liberty‐to‐innovation is the most critical channel in which democracy holds a unique advantage over autocracy in promoting growth, especially during the stage of growth via innovation. Our theory thus predicts that democracy holds a positive but indirect effect upon growth via the channel of liberty‐to‐innovation, conditioned by the level of economic development. We then present quantitative evidence for our theory. To our best knowledge, we are the first to propose such an indirect and conditional effect of democracy upon economic development and provide systematic evidence. Our study promises to integrate and reconcile many seemingly unrelated and often contradictory theories and evidence regarding regime and growth, including providing a possible explanation for the inconclusive results from regressing overall regime score against the rate of economic growth or change in level of GDP per capita. [ABSTRACT FROM AUTHOR]

It is widely believed that economic institutions such as competitive markets, the banking system, and the structure of property rights are essential for economic development. But why economic institutions vary across countries and what are their deep origins is still a question that is widely debated in the developmental economics literature. In this study, we provide an empirical test for the provocative hypothesis that the prevalence of infectious diseases influenced the formation of personality traits, cultural values, and even morality at the regional level (the so called Parasite- Stress Theory of Values and Sociality), which then shaped economic institutions across countries. Using the prevalence of pathogens as an instrument for cultural traits such as individualism, we show in a two-stage least squares analysis that various economic institutions, measured by different areas of the index of Economic Freedom by the Heritage Foundation, have their deep origins in the historical prevalence of infectious diseases across countries. Our causal identification strategy suggests that cultural values affect economic institutions even after controlling for a number of confounding variables, geographic controls, and for different sub-samples of countries. We further show that the results are robust to four alternative measures of economic and political institutions. [ABSTRACT FROM AUTHOR]

We use a novel data set within an instrumental variables framework to test whether the presence and language of constitutional environmental rights influence environmental outcomes. The outcome variables include Yale's Environmental Performance Index and its components. We employ two-stage least squares to account for reverse causality, that is, the possibility that a country which takes steps to protect the environment might also be more likely to constitutionalize environmental rights. Our first stage theory combines constitution norms, opposition costs, and generation effects. Our controls include country income, which means that our study is also related to the Environmental Kuznets Curve literature. We find that constitutions do indeed matter for positive environmental outcomes, which suggests that we should not only pay attention to the incentives confronting polluters and resource users, but also to the incentives and constraints confronting those policymakers who initiate, monitor, and enforce environmental policies. [ABSTRACT FROM AUTHOR]

Bilateral donors have recognized the need to improve the consistency of donors' policies towards developing countries. However, the impact of policy consistency on economic development has not been documented in the literature to date. Our contribution is twofold: firstly, we use the indices provided by the Center for Global Development (CGD) to construct indicators of overall donors' policies performance and donors' policies consistency at the recipient level. Secondly, we assume that the growth-consistency nexus is dynamic and our results suggest that an increase in consistency by one standard deviation increases growth on average by 1,1 percentage point. This result holds for different instrumentation strategies and robustness checks. We also highlight that the overall policy performance (OPP) increases growth above a sufficient level of donors' policies diversification and level of OPP. [ABSTRACT FROM AUTHOR]

Generalized morality reflects ethical norms in society about the inappropriateness of behaviors that can cause harm to others. Generalized morality may be an important factor affecting the economic performance of countries. An indicator of generalized morality is constructed from data from the World Values Survey. One question examined is whether generalized morality is correlated with economic growth rates in per capita GDP across a sample of countries, controlling for institutions and other factors expected to affect economic performance. A second question examined is whether the path by which generalized morality affects growth is direct or indirect through generalized trust. The findings reveal that generalized morality is moderately correlated with economic growth, but its effect appears to be manifested through generalized trust when economic institutions are weak. [ABSTRACT FROM AUTHOR]

Tolerance has the potential to affect both economic growth and wellbeing. It is therefore important to discern its determinants. We contribute to the literature by investigating whether the degree to which economic institutions and policies are market-oriented is related to different measures of tolerance. Cross-sectional and first-difference regression analysis of up to 69 countries reveals that economic freedom is positively related to tolerance towards homosexuals, especially in the longer run, while tolerance towards people of a different race and a willingness to teach kids tolerance are not strongly affected by how free markets are. Stable monetary policy and outcomes is the area of economic freedom most consistently associated with greater tolerance, but the quality of the legal system seems to matter as well. Through instrumental variables and first-difference results we find indications of a causal relationship. [ABSTRACT FROM AUTHOR]

This article examines the interrelationships between democracy, economic freedoms, and economic growth. We study 24 post-communist economies over the period 1990-2007, and find that strong democratic institutions are associated with greater economic freedoms and larger public sectors and public deficits. Stronger economic freedoms lead to more rapid growth, but large public sectors and public deficits have adverse effects on growth. We identify trade freedom, monetary freedom and freedom from corruption as the most important indicators of economic freedom for growth in transition countries over the period 1994-2007. Some of the factors associated with faster growth prior to the crisis were associated with greater declines in growth during the first years of the financial crisis (2008-2009). [ABSTRACT FROM AUTHOR]

Summary We exploit differences in the number and distribution of natural resources to estimate the presence of a curse of natural resources on economic growth. Building on a sample of 93 developing and developed countries covering the years 1980 to 2007, we show that, given the value of the resource endowment, the higher the number of resources is, the higher is a country's per-capita growth. This finding is robust to the addition of all usual controls and to the splitting of the dataset into subsamples such as non- OECD or non-African countries only. [ABSTRACT FROM AUTHOR]

Estimation of the effects of institutions on long-term growth is severely limited by the endogeneity of institutions to the choices of governments. I thus approach the model from the household level and estimate the effects of aggregate institutions on household wealth. Under the benign assumption that institutions are exogenous to household choices this model gives unbiased estimates of multiple institutional variables. Issues then arise of the basic concepts and measurements of institutional variables. I revisit these issues and present new regional level institutional variables that are representative of 151 regions in thirteen African countries and measure clear concepts of institutions. I find that regional level institutions have significant effects on household wealth in a nonlinear fashion. Fear of crime, expectations of law enforcement and corruption at multiple levels are all estimated to have significant nonlinear effects on household wealth. [ABSTRACT FROM AUTHOR]

Merging the impacts of interest groups on economic growth with governments' interest in unemployment and inflation, there should be a link between political business cycles and interest group formation. Interpreting Olson's Law in a short-run perspective and integrating it with political business cycles, this contribution examines the link. We illustrate how such a model could look like, before investigating the relationship of lobbies, governments and voters empirically. As the time-series-analysis based on the German lobby-list shows, lobbies strategically organize their activity to foster reelection of the governments: It takes two to tango. [ABSTRACT FROM AUTHOR]

The effect of aggregate foreign direct investment (FDI) on economic growth remains uncertain in the literature. We revisit this FDI–Growth relation by analyzing the components of FDI – greenfield investment and cross-border mergers and acquisitions (M&As). Our analysis contributes to the existing literature by focusing on potentially heterogeneous growth effects of different FDI entry modes. Using a sample of 84 countries from 1987 to 2001, we separately examine the growth effects of greenfield investment and M&As. We find that greenfield investment and M&As have different impacts on economic growth. Greenfield investment promotes economic growth while M&As can be beneficial only when the host country has an adequate level of human capital. Our results provide support for receiving M&As when policymakers allocate more resources for human capital accumulation. [ABSTRACT FROM AUTHOR]

The Grand Transition (GT) view claims that economic development is causal to institutional development, and that many institutional changes can be understood as transitions occurring at roughly the same level (zone) of development. The Primacy of Institutions (PoI) view claims that economic development is a consequence of an exogenous selection of institutions. Our survey of the empirical evidence and our own estimates reveal that it is easy to find convincing evidence supporting either of the two views. Property rights do affect development as suggested by the PoI view. However, democracy is mainly an effect of development as suggested by the GT view. We conclude that the empirical results are far too mixed to allow for a robust assessment that one of the two views is true and the other false. This finding implies that focusing on institutional development is unlikely to be successful as the key strategy for the economic development of poor countries. [ABSTRACT FROM AUTHOR]

Copyright of Kyklos is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Standard indicators of human capital endowment — like literacy, school enrollment ratios or years of schooling — suffer from a number of defects. They are crude. Mostly, they refer to input rather than output measures of human capital formation. Occasionally, they produce implausible effects. They are not robustly significant determinants of growth. Here, they are replaced by average intelligence. This variable consistently outperforms the other human capital indicators in spite of suffering from severe defects of its own. The immediate impact of institutional improvements, i.e., more government tolerance of private enterprise or economic freedom, on growth it is in the same order of magnitude as intelligence effects are. [ABSTRACT FROM AUTHOR]

Most studies on the relationship between economic freedom and growth employ a measure of economic freedom based on an (ad hoc) aggregation of various underlying components. We argue that the alternative aggregation procedure as recently suggested by Heckelman and Stroup (2000) — in which aggregation is directly based upon the relevance of each component for growth, as determined by multivariate regression analysis — is seriously flawed. We present an alternative index based on latent variable estimation techniques. Using standard robustness analyses we find that this index of economic freedom is not robustly related to economic growth. [ABSTRACT FROM AUTHOR]

Empirical research has shown that both more economic freedom and a higher stability of policy variables are supportive for economic growth. Thus, the path of policy liberalization may have a considerable influence on a nation’s growth performance. Using the Fraser-index of economic freedom, this article shows empirically that policy volatility proves to be growth depressing, even if the state liberalizes the economy in the long-run. Growth is significantly higher if liberalization occurs on a smoother path. [ABSTRACT FROM AUTHOR]

Investigates the impact of direct democracy in Switzerland. Promotion of economic and political prosperity; Decrease of public sector size in classical liberal; Evolution of existing political and legal practices.

Analyzes the influence of politics for the economic growth and development in Goteborg, Sweden. Evidence of broad empirical trends in the wealth and poverty of the nation; Use of basic one-neoclassical production function model in the study; Variations on the measurement of human capital.

Seeks to determine which of the disaggregated categories of economic freedom lead to growth using Heston-Summers growth data. Components of economic freedom indicators; Comparison of economic freedom indexes; Background on the literature regarding economic freedom and growth; Consequences of the summary measures of freedom.

Investigates the effects of income inequality on the growth of productivity, capital, and gross domestic product. Role of political instability, income redistribution and human capital channels; Productivity, investment and total effect; Positive relationship between inequality and socio-political instability.

Investigates theories on population growth and its potential impact on the development process and on economic welfare. Conventional models of demographic change which assume homogeneous preferences for men and women with respect to completed family size; Model of population growth when women really count; Evidences that women prefer fewer children than men.

Argues that for an adequate information of structural change that accompanies economic growth one needs not only lagging productivity growth but also income elastic demand for services. Rise in the relative price of services; Rise in the employment share of the service sector; Constancy in terms of contributions to the gross domestic product.

Presents a consequentialist analysis of the impact of overlapping redistributive obligations on the process of economic development. Economic analysis on altruism and the taxonomy of altruistic motivations; Relevance of a comparison between families and communities with a study on institutions on their interactions; Consequences of extended altruistic interactions in developing countries.