Economic Growth In Less Developed Countries Research Articles

The effects of debt dependence on economic growth in less-developed countries, 1990–2019

Recent years have witnessed a dramatic increase in debt servicing for developing countries. Drawing on the theoretical insights of dependency theory, I investigate the relationship between debt dependence and economic growth in less-developed countries. Results from two-way fixed effects estimation of an expansive country-level dataset on 103 less-developed countries from 1990 to 2019 indicate that debt dependence exerts a harmful effect on economic growth, net of relevant statistical controls. I conclude by discussing the theoretical and policy implications of the empirical analyses.

Merger Control and Economic Growth of LDCs: Some Observations and Recommendations

The aim of this paper is to evaluate merger control as a segment of competition policy in less developed countries (LDCs) and to propose desirable regimes, using economic growth as the evaluation standard. Three regimes of merger control are recommended, depending on the level of institutional and economic development: for LDCs with low levels of both, the absence of merger control is suitable; for LDCs with intermediate levels of both, very restricted merger control is recommended; this should evolve into somewhat restricted merger control for the remaining LDCs. Advocacy is recommended as the main substitute activity of the national competition authorities.

FDI and economic growth in less developed countries

During the 1960s and 1970s, foreign direct investment (FDI) and the activities of multinational enterprises (MNEs) in less developed countries (LDCs) were generally viewed unfavourably, often being considered exploitative and as leading to worsening labour market conditions and job losses. However, there was a gradual shift in perception during the 1980s and 1990s, with increasing recognition of positive features of FDI such as technological spillovers and the increase in demand for domestic industry. Hence many countries, including LDCs, have introduced measures such as favourable tax treatment for foreign firms in order to attract FDI2. Against this background, FDI flows to LDCs have grown rapidly, increasing from 0.9 per cent of LDCs’ combined GDP in 1990 to a peak of 4.1 per cent in 1999, before declining slightly to 3.3 per cent in 2003 (World Bank, 2005). This article surveys the theoretical and empirical literature that describes the role of FDI in the economic growth of LDCs, and extracts its policy implications.

The Internet and Economic Growth in Less-developed Countries: A Case of Managing Expectations?

A discussion of the theory of technology and economic growth suggests potentially negative implications for the impact of the Internet on developing countries. Technology in general is undoubtedly central to the growth process, but economists define technology in very broad terms. The impact of any particular, invented, technology is likely to be small. This theoretical perspective is supported by the empirical evidence on the limited impact of past "information revolutions" on less-developed countries (LDCs) and the present impact of the Internet on advanced economies. Furthermore, LDCs appear ill-prepared to benefit from the opportunities that the Internet does present--they lack the physical and human capital, along with the institutions required, to exploit the e-economy. Finally, even optimistic forecasts of the Internet's global economic impact are small in scale compared with the challenge of development. This has significant implications for development policy.

Economic Growth, Environmental Scarcity, and Conflict

The global population is expected to reach nine billion by 2050, intensifying “environmental scarcity,” a term used here to denote environmental degradation and pressure on renewable and nonrenewable natural resources. Currently, environmental scarcity is more pronounced in less developed countries (LDCs) than in developed countries (DCs). Many argue that this scarcity is increasingly promoting armed conflicts in LDCs. The conventional solution to the problem of environmental conflict is economic growth. It is argued that as LDCs' income per capita rises to the level ofthat of DCs, their population growth and environ mental scarcity will decline, preventing conflict and building peace. This paper illustrates that the growth approach to conflict prevention probably will not work because the biosphere most likely would not be able to support a DC-level standard of living for all the people on Earth, at least not at the current state of technology. The resulting intensification of pressures on natural resources is likely to induce more, not less, environmental conflict. Still, economic growth in LDCs is important on both moral and practical grounds. One could make economic growth in LDCs ecologically—and therefore politically—feasible by balancing it with a coordinated economic contraction in DCs. The difficulties associated with implementing this approach are discussed. I believe that the approach will probably be rejected by DCs in the short run, but might eventually be initiated in response to some global ecological-social-political crisis. The problem is that such a crisis also might result in extensive damages. Whether or not such damages could be alleviated would depend on the nature ofthe crisis and the extent of the damages up to that point.

External security threats, defense expenditures, and the economic growth of less-developed countries

External security threats, defense expenditures, and the economic growth of less-developed countries

Export Instability and Economic Growth in Sub-Saharan Africa

Empirical research on the relationship between export instability and economic growth in less developed countries (LDCs) has yielded mixed results. While some researchers find a negative relationship between export instability and economic growth, others find a positive relationship. A third group of researchers finds no significant relationship between export instability and economic growth in LDCs.1 Those who find a negative relationship between export instability and economic growth in LDCs stress the negative effect export instability has on the supply of output through the generation of uncertainty in long-term planning as well as due to shortages of inputs at critical times during the production process. Those who find a positive relationship between export instability and economic growth argue that LDCs respond to export instability by reducing consumption. This process, if repeated over a period of time, increases savings and hence the rate of investment. Those who find no significant relationship between export instability and economic growth argue that LDCs are able to anticipate the fluctuations in export earnings and plan for such fluctuations; hence instability in export earnings has no appreciable effect on economic growth. C. Moran investigates the relationships between domestic savings rate and economic growth rate on the one hand and export instability on the other, in a sample of LDCs.2 He finds that export instability has no significant long-run impact on either domestic savings rate or economic growth rate. However, over relatively short periods of time, export instability has a negative and significant effect on both savings and economic growth rate. The negative effect occurs when the negative effects of price and of quantity fluctuations reinforce each other. On the other hand, when the negative effect of price fluctuations is counterbalanced by the effects of quantity fluctuations, export instabil-

Effects of Eastern European and Western technologies on LDCs: a macroeconometric analysis

Questions involving technology transfer to less developed countries (LDCs) command an increasing interest in the world today. In this paper, two macroeconometric models are developed to compare the impacts of Eastern European medium-advanced and Western most-advanced technologies on the economic growth of LDCs. The models are then used to analyse data from the Egyptian industrial sector for the period 1952–1980.

Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence

A study of the impact of military expenditures on economic growth and development examines the differences in the results of previous studies which led to contradictory conclusions. The authors find that these differences are due to sample variations, specificational choices, and the different time periods examined. The data indicate that there is no consistent, statistically significant connection between military spending and economic growth. Augmentation of the models suggests that military expenditures neither help nor hurt economic growth to any significant extent. 2 tables.

Defense Expenditures and Economic Growth in Developing Countries

Abstract : Studies of the effect that defense spending has had on economic growth in less-developed countries have produced rather mixed results. We contend that this is because these studies have failed to take into account the relative financial constraints faced by individual countries. In an extension of the seminal work by Emile Benoit on defense spending and its effect on economic growth, I we hypothesize that relatively poor countries tend to cut back high-growth development expenditures in favor of maintaining defense programs, while relatively rich countries are much less likely to abandon development expenditures given a constant level of defense preparedness. Thus, we should expect a negative relationship between defense and growth in the poorer countries, but a positive relationship in the richer countries. In this article, we examine the relevant literature, and develop a model of defense and economic growth that explicitly incorporates resource constraints. The results of the cluster analysis that was used to group the sample of countries into a richer and poorer group are presented. Finally, the results of the within-group regressions are presented.

EFFECT OF CAPITAL IMPORTS ON SAVINGS AND GROWTH IN LESS DEVELOPED COUNTRIES

This paper examines some of the arguments of the critics of foreign aid and other capital inflows to less developed countries (LDCs). The paper finds that the critics lack sufficient evidence on the supposedly adverse effect of capital transfers to LDCs on their savings and growth of incomes. This, however, does not mean that these capital inflows always promote growth in LDCs. In particular, it is shown that the relative importance of foreign capital on economic growth of LDCs would depend on the degree to which that growth is constrained by the lack of capital.

Foreign Trade, Aid and Economic Growth in Less-Developed Countries by Gunnar Floystad. Oslo: Scandinavian University Books, Universitetsforlaget, 1968.

Gunnar Floystad's Foreign Trade, Aid and Economic Growth is concerned with the interrelations between foreign trade, foreign aid and economic growth of a group of less developed countries (LDC) comprising all of Latin America, Africa, the Middle East and Asia, excluding USSR, Japan and Mainland China. The book is divided into two parts: Part One uses a model of trade, aid and growth to deduce a relationship between GNP, exports and net capital inflows of the LDC. Assuming exports to be given exogenously and net capital inflows to grow at a constant rate over time, growth of GNP is projected corresponding to alternative postulates about growth of exports and growth of net capital inflows via the simple exponential function, E(t) = M0 [X(t) + B(t)]B, where E, X and B stand for GNP, exports and net capital inflows respectively, and M is a constant. Part Two analyses in some details the export prospects for a list of traditional products currently exported from LDC to developed countries.

Potential Contribution of Agriculture to Economic Growth in Less-developed Countries

Substantial betterment of conditions in the less- developed countries is dependent upon both private and public action to achieve rapid increases in output. Improved tech nology is the key to higher output, but successful adoption requires additional capital and the learning of new technical and management skills. Agriculture can become a leader in economic growth by providing labor-intensive employment for rapid increases in food production. Larger food supplies also will lessen the inflationary pressures resulting from the con struction phase of a development program. With the help of technical advisers, combinations of improved technology can be adopted that will greatly increase production per acre with a small investment of capital in relation to the resulting output. The combinations usually include chemical fertilizer, improved seed, pesticides, and better soil and water management. Help also will be needed in obtaining the necessary production sup plies, in arranging credit at reasonable rates, in developing storage and marketing facilities, and perhaps even in providing for changes in the tenure system. All of these aids may need to be combined into one program in order to shift rapidly from a primitive agriculture to the beginnings of modern farming.