Assessing the Effect of Public Capital on Growth: An Extension of the World Bank Long-Term Growth Model

Devadas, Sharmila; Pennings, Steven

doi:10.1596/1813-9450-8604

Cited by 10 publications

(11 citation statements)

References 22 publications

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“…These beneficial effects, however, require a framework that regulates, organizes, and coordinates the governments and companies that build public infrastructure and provide its services. Moreover, as highlighted by Pritchett (1996) and Devadas and Pennings (2018), the amount of infrastructure spending is not necessarily an indication of effective infrastructure investment. The quality of spending matters, and this seems to be highly related to the strength of public institutions (World Bank, 2003.…”

Section: Infraestructurementioning

confidence: 99%

Productivity Growth: Patterns and Determinants “Across” the World

Kim

Loayza

2019

ECONOMIA

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This is the background paper for the productivity extension of the World Bank's Long-Term Growth Model (LTGM). Based on an extensive literature review, the paper identifies the main determinants of economic productivity as innovation, education, market efficiency, infrastructure, and institutions. Based on underlying proxies, the paper constructs indexes representing each of the main categories of productivity determinants and, combining them through principal component analysis, obtains an overall determinant index. This is done for every year in the three decades spanning 1985-2015 and for more than 100 countries. In parallel, the paper presents a measure of total factor productivity (TFP), largely obtained from the Penn World Table, and assesses the pattern of productivity growth across regions and income groups over the same sample. The paper then examines the relationship between the measures of TFP and its determinants. The variance of productivity growth is decomposed into the share explained by each of its main determinants, and the relationship between productivity growth and the overall determinant index is identified. The variance decomposition results show that the highest contributor among the determinants to the variance in TFP growth is market efficiency for Organisation for Economic Co-operation and Development countries and education for developing countries in the most recent decade. The regression results indicate that, controlling for country-and time-specific effects, TFP growth has a positive and significant relationship with the proposed TFP determinant index and a negative relationship with initial TFP. This relationship is then used to provide a set of simulations on the potential path of TFP growth if certain improvements on TFP determinants are achieved. The paper presents and discusses some of these simulations for groups of countries by geographic region and income level. In addition, as a country-specific illustration, the paper presents simulations on the potential path of TFP growth for Peru under various scenarios. An accompanying Excelbased toolkit, linked to the LTGM, provides a larger set of simulations and scenario analysis at the country level for the next few decades.

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Section: Infraestructurementioning

confidence: 99%

Productivity Growth: Patterns and Determinants “Across” the World

Kim

Loayza

2019

ECONOMIA

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“…Also, for all the considered developing countries with an upper middle income, the same features of financing innovation were recorded. Public investment (as a percentage of GDP) is at a level comparable to developed countries [23], but private investment is noticeably [24]. This testifies to the lack of faith of local private and foreign investors in the possibility of obtaining a reliable income, which is primarily associated with an assessment of the stability of the political, economic and social environment.…”

Section: Also When Analyzingmentioning

confidence: 99%

Fuzzy regression model of the impact of technology on living standards

Zelenkov¹,

Lashkevich²

2020

Bus. Inform.

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This paper proposes a model of the impact of technology on the standard of living based on fuzzy linear regression. The Human Development Index (HDI) was chosen as a dependent variable as an indicator of the health and well-being of the population. The explanatory variables are the Network Readiness Index (NRI), which measures the impact of information and communication technologies (ICT) on society and the development of the nation, and the Global Innovation Index (GII), which measures the driving forces of economic growth. The analysis is based on data for 2019 for four groups of countries with different levels of GDP per capita. For developed countries, the positive and balanced impact of innovation and ICT on living standards has been confirmed. For two groups of developing countries (upper and lower middle income), the GII coefficient was found to be negative. A more indepth analysis showed that this is due to the state of political and social institutions. This fact means that without a simultaneous increase in the maturity of institutions, stimulation of other areas of innovative development (education, knowledge and technology, infrastructure) leads to a decrease in the quality of life.

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“…Underlying the simulations in this paper is the following base model, reproduced here in an abridged manner from Devadas and Pennings (2019). All the simulations are run using the Excel-based toolkit constructed based on this model.…”

Section: Appendix 1 the Long Term Growth Model And Extensionsmentioning

confidence: 99%

Malaysia's Economic Growth and Transition to High Income: An Application of the World Bank Long Term Growth Model (LTGM)

Devadas¹,

Guzmán²,

Kim³

et al. 2020

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Assessing the Effect of Public Capital on Growth: An Extension of the World Bank Long-Term Growth Model

Cited by 10 publications

References 22 publications

Productivity Growth: Patterns and Determinants “Across” the World

Productivity Growth: Patterns and Determinants “Across” the World

Fuzzy regression model of the impact of technology on living standards

Malaysia's Economic Growth and Transition to High Income: An Application of the World Bank Long Term Growth Model (LTGM)

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