The aim of the present study is twofold. First, we develop a
theoretical model which incorporates the role of institutions in
promoting economic growth. The theoretical model predicts that rent
seeking activities decrease as institutional quality improves, and hence
income increases and vice versa. Second, we conduct an empirical
analysis to quantify the impact of institutions on economic growth in
selected Asian economies over the period 1996- 2012 by employing both
static and dynamic panel system Generalised Method of Moments (GMM)
technique with fixed effects. The empirical results reveal that
institutions indeed are important in determining the long run economic
growth in Asian economies. However, the impact of institutions on
economic growth differs across Asian economies and depends on the level
of economic development. The results reveal that institutions are more
effective in developed Asia than developing Asia. This evidence implies
that different countries require different set of institutions to
promote long term economic growth. Keywords: Institutions, Economic
Growth, Panel Evidence, Asia
This study empirically explores the growth effects of rent seeking activity (RSA) for a group of 52 developing/transitional countries, using a dynamic panel data approach. The modelling framework is a Mankiw-Romer-Weil (MRW) conditional convergence model augmented by measures of the opportunities for RSA, namely indices for the extent of democracy and corruption control. We find that health is more relevant than educational participation as a measure of human capital development in the MRW model. The overall empirical analysis shows that RSA retards economic growth, in that democratic institutions, which are inimical to RSA, are growth enhancing. We also find that reduction in the extent of corruption is only growth-enhancing if supported by well-developed democratic institutions.
This study attempts to analyse the impact of fiscal
decentralisation on economic growth. It also examines the
complementarity between fiscal decentralisation and democratic
institutions in promoting growth. The modelling framework is the
endogenous growth model augmented with measures of fiscal
decentralisation through democratic institutions. To capture the
multidimensionality, three different measures of fiscal decentralisation
are used. The overall analysis shows that revenue decentralisation
promotes economic growth while expenditure decentralisation retards
economic growth. Composite decentralisation positively influences
economic growth implying that simultaneous decentralisation of revenue
and expenditure reinforce each other to promote economic growth.
Analysis also shows that democratic institutions play a significant role
in realising the benefits of fiscal decentralisation. Various policy
implications emerge from this study. JEL Classification: C26, E02, H11,
H72, O11 Keywords: Fiscal Decentralisation, Democracy, Economic Growth,
Pakistan
The positive relationship between human capital and income/wages has been supported by empirical research. Millennium Development Goals (MDGs) and the Poverty Reduction Strategy Paper (PRSP) enormously emphasize on human capital for curbing poverty. The economic development in East Asian countries is also linked with investment in education for the development of human capital. This study is designed to investigate the relationship of different levels of education and experience upon urban poverty at medium sized city in Pakistan such as Sargodha. A survey-based analysis was carried out on a sample of 330 households. Poverty status of the individual is defined by using adjusted official poverty line. Results show that education and experience is negatively related with the poverty status of individuals and this fact sustains even in separate gender estimates as well. This implies education of poor is necessary in breaking the vicious circle of poverty. Combined effort by public, private, community participation and NGO's with special focus on elementary (Primary and middle) education is suggested for reducing poverty by increasing the productivity of the poor through education.
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