Researching the political economy determinants of economic growth: a new conceptual and methodological approach

Researching the political economy determinants of economic growth: a new conceptual and methodological approach

The large existing literature on the determinants of economic growth has traditionally focused on understanding its proximate determinants, with an increasing interest in the role of institutions. A very recent literature now recognises the political determinants of the character of such institutions.

The new approach presented in the current brief contributes to the literature on the political determinants of economic growth. The approach seeks to generate understanding about the political drivers of the frequent shifts in growth rates that developing countries witness over time, and also facilitates the testing of a series of concerned hypotheses.

The document describes the new approach as follows:

  • it moves beyond a focus on “what” policies and institutions are conducive to inclusive growth, and towards analysis of “how” political processes shape the emergence and maintenance of these policies and institutions
  • it provides a new framework for analysing the political drivers shaping transitions between economic growth regimes
  • it enables exploration of the reasons why growth both accelerates from stagnation/crisis to stable/miracle growth, and may decelerate/collapse at any stage of stable/miracle growth
  • it facilitates investigations into why some countries persistently remain in miracle/stable growth regimes, while others suffer growth collapses

Overall, the author highlights that the move from growth acceleration to growth maintenance would depend on the movement in the deals space from closed ordered deals to open ordered deals.

 

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