Political Economy Of Growth Research Articles

BOOK REVIEW: The Political Economy of Growth in Vietnam: Between States and Markets, by Guanie Lim

BOOK REVIEW: The Political Economy of Growth in Vietnam: Between States and Markets, by Guanie Lim

UN'ANALISI ISTITUZIONALE DEL DECLINO DELL'ECONOMIA ITALIANA

This paper attempts an interpretation of Italy’s recent economic decline, which began two decades before the Great Recession. It argues that its deeper roots lie in the political economy of growth. This interpretation is illustrated through a discussion of Italy’s recent growth trajectory and of its politico-economic equilibrium. The emphasis is placed on the country’s convergence to the productivity frontier and TFP performance, and on the evolution of its social order and institutions. The lens through which this case is reviewed, to illuminate the origins and evolution of the current constraints to growth, is drawn from institutional economics and Schumpeterian growth theory. It is exemplified by analysing two alternative reactions to the insufficient provision of public goods: an opportunistic one—employing tax evasion, corruption, or clientelism as means to appropriate private goods—and one based on enforcing political accountability. From the perspective of ordinary citizens and firms such social dilemmas can typically be modelled as coordination games, which have multiple equilibria. Self-interested rationality can thus lead to a spiral, in which several mutually reinforcing vicious circles lead society onto an inefficient equilibrium characterized by low political accountability and weak rule of law.

Paul Baran’s Economic Surplus Concept, the Baran Ratio, and the Decline of Feudalism

In his book, the Political Economy of Growth (1957), and in an article he wrote several years earlier (1953), the economist Paul A. Baran noted how in an economic system characterized by a hierarchy of classes and where economic and political power are concentrated in the top class of such a system, the amount of output and income above what is consumed by most people (e.g., food, clothing, housing, public safety, education) mostly goes to the top class. This extra amount is what he called the economic surplus, a form of savings or income left over after consumption. In a feudalistic system, there is little incentive to use the proceeds of this type of surplus to buy more tools and equipment for more production of output and income. The lord or baron has little incentive to lend or give serfs money because he may not benefit from any increased productivity by them. It is with capitalism that such incentives to re-invest in production become important. This paper uses recently published and estimated historical data to illustrate Baran’s observations and thoughts on feudalism. It is shown that during the 13th and 14th centuries in England that the economic surplus declined, and this decline helps to explain the “crisis of feudalism” that started in the 13th century. It is not until several centuries later when capitalism becomes the dominant economic system that the economic surplus begins to rise on a consistent basis probably due to the reinvestment of a portion of the surplus into productive activities and a greater ratio of capital income to rental income and a greater ratio of investment to economic surplus. However, and somewhat surprisingly, by the 19th Century the surplus still does not attain levels reached in the 13th Century.

Economic Surplus, the Baran Ratio, and Capital Accumulation

In 1957, in the Political Economy of Growth, Paul Baran made a seminal contribution to our understanding of the connection between economic surplus—a concept he introduced into the development discussion—and growth. Given that the ruling class controls the surplus of society, how the surplus is used—whether it is invested, consumed, or simply wasted—is at its discretion. The effective utilization of surplus implies a reasonable rate of capital accumulation and economic development. In the following study of the utilization of surplus I compare the size of surplus and gross capital formation in a variety of countries starting from the mid–nineteenth century.

THE ROLE OF FIRST-BEST GOVERNANCE INSTITUTIONS ON GROWTH IN LEAST DEVELOPED COUNTRIES

The study addresses the issue of the low level of GDP per capita growth in Least Developed Countries (LDCs), with special emphasis on the role of first-best governance institutions as a main determinant of growth. LDCs can be characterized by a clear deficit in first-best governance institutions compared to high-income OECD countries supporting the argument that economies that are different for a variety of reasons will differ both in their institutions and in their income per capita. The contribution of the study is to fill the gap in the new political economy of growth by establishing the mechanism of how first-best governance institutions affect growth through the political, economical, administrative and democratic channels. Although the adoption of first-best governance institutions of advanced countries to LDCs is not a panacea to sustainable economic growth, improvement of first-best governance institutions in LDCs significantly induce growth, since investments in governance institutions are subject to diminishing returns, so that the benefits are most pronounced for smaller and developing economies.

Luigi Pasinetti and the Political Economy of Growth and Distribution

Luigi Pasinetti and the Political Economy of Growth and Distribution

Environmental governance in the People’s Republic of China: the political economy of growth, collective action and policy developments – introductory perspectives

The special issue is introduced here by considering the state of the environment and environmental governance in the PRC. While significant, substantial developments in legislation and policymaking remain insufficient to tackle the degradation of the environment and the increasing saliency of environmental issues in Chinese politics. Tremendous challenges remain in the areas of natural resources governance, environmental health, and transition paths in agriculture and urban development. They need to be addressed by an even stronger commitment of the Chinese leadership, accompanied by significant reforms in the areas of environmental litigation, the transparency of local government decision-making, and the capacity of the self-organisation of Chinese citizens in mobilising on environmental issues.

What are the likely interactions among innovation, government debt, and employment?

The study here analyzes the interactions among labor, R&D intensity, and public expenditure on education (indicators of innovation), considering public debt of countries. The study is based on 27 European countries over the 1995–2009 and applies multiple regression analysis. Main findings seem to be: a significant interaction of public expenditure on education and R&D intensity with employment rate, whereas an increase of general government consolidated gross debt has a negative interaction for employment rate as well as for technology indicators. The theoretical framework and empirical evidence suggest vital political economy implications to support employment rate during contractions of the business cycle. In particular, considering the specificity of the economic structure of countries, a fruitful lung-run political economy of growth should slowly dry out public debt by supporting GDP growth, rather than reducing government debt with high taxation and balanced-budget rules, in order to decrease frictional effects for patterns of economic, technological, and employment growth.

Trade Unions and the ICFTU in the Age of Developmentalism in Brazil, 1953–1962

Abstract This article examines the relations between the International Confederation of Free Trade Unions (ICFTU) and its local allies in Brazil during the 1950s and early 1960s. Devised as a tool for uniting non-Communist trade unions worldwide, the ICFTU saw its influence limited by US labor policies toward Latin America and the conditions of labor politics in Brazil, contrary to what happened in Western Europe. The developments on both domestic and international fronts of organized labor had important implications for the political economy of growth and inequality, as the confrontational pattern of labor relations undermined the development of a social compact that could promote economic growth and social reform in postwar Brazil.

Two Pauls

In 1957, when I was young and thought I knew everything, I was just about to go to graduate school in economics. Then I read Paul Baran’s The Political Economy of Growth. I immediately sent him an eight-page, single-spaced review of his book. I said that I liked it very much, but had some questions about it. Paul wrote back asking me to become his research assistant and study at Stanford. Unfortunately he could pay so little that it covered only half the tuition. I could not afford it.… [But] I did visit Paul about once every two weeks. He welcomed me because his colleagues had isolated him due to their fears of the witch hunt. The reason he had offered me so little was that Stanford would not give him more money for any purpose. Paul had tenure, but the alumni were angry that he was not fired for his outspoken opposition to U.S. imperialist aggression against Cuba.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

Book Review McCartney, Mathew, Pakistan – The Political Economy of Growth, Stagnation and the State, 1951–2009, Routledge, London and New York

This book is, one can assert without a doubt, sui generis, unique in that it provides an entirely new perspective on the development of Pakistan’s political economy. It is a thorough and objective analysis, an eye-opener, and the author leaves no stone unturned.

India: the political economy of growth, stagnation and the state, 1951-2007

Understanding the drivers and inhibitors of economic growth is critical for promoting development in less developed countries, including India. This book examines economic growth in India from 1951 to the present, challenging many accepted orthodox views. It argues that growth and stagnation should be considered over the medium term, and that the precise role of the state – in relation to particular historical and political-economic circumstances – is more important than the overall level of state involvement or disengagement. The book uses an empirical approach to contend that the state has an important role in several key areas including: mobilising a surplus; allocating the surplus in an efficient way to productive investment projects; and in building institutions (including political parties) through which conflict can managed between the different losers and rent-seekers affected by economic changes. It shows how, over time and in periods of growth and stagnation, the state in India has acted in key areas, and how the actions of the state has had a profound impact on economic outcomes. Overall, the book makes a major contribution to understanding the economic history of development in India and to understanding the role of the state in economic development more generally.

The Political Economy of growth and crisis in Indonesia Focusing on the Periods Before and After the Economic Crisis

The Political Economy of growth and crisis in Indonesia Focusing on the Periods Before and After the Economic Crisis

India — The Political Economy of Growth, Stagnation and the State, 1951–2007 by Matthew McCartney

<i>India — The Political Economy of Growth, Stagnation and the State, 1951–2007</i> by Matthew McCartney

The political economy of growth in China and India

This paper attempts to examine the growth performance and its impact on inequality and poverty in China and India. The recent upsurge in growth rates in China and India is seen widely as the ‘success’ story of globalization. It is also claimed that these developments will make a significant impact on the reduction of global inequalities and poverty. Although a number of scholars have analysed the recent economic performance of China and India, these studies, however, have not taken into account the past policies and their impact on current performance. We find there is a gap in the current discussion, which overlooks historical and economic factors on the recent performance. This article critically assesses the claimed fall in global poverty due to mainly the rise of China and India in recent years. The article questions the ‘pro-globalization’ argument, which suggests that there is a link between ‘market liberal’ free market policies and falling poverty. It is argued instead that the evidence concerning poverty reduction is ambiguous, and it is not that the most successful economies have adopted pro-globalization policies. Studying the developmental changes taking place in these two countries is important because they together account for 37.5% of the global population. These populous neighbours, regarded as symbols of poverty and failure until two decades ago, contain large numbers of people living below the officially defined poverty line.

Institutions and market economies: the political economy of growth and development - Edited by William R. Garside

Institutions and market economies: the political economy of growth and development - Edited by William R. Garside

Social Structures of Accumulation Theory: The State of the Art

This article summarizes developments within the SSA perspective since the publication of Social Structures of Accumulation: The Political Economy of Growth and Crisis in 1994. The article first overviews the literature produced since 1994, defining the main lines of research, starting with David Gordon's last contributions to the SSA framework before his death in 1996. In addition, a number of contributions from the academic discipline of sociology are highlighted. The geographic reach of the SSA framework has been extended to new areas, most prominently to developing countries. Several authors have applied the SSA framework to the history and analysis of specific institutions, including institutions of criminal justice and social control, as well as corporate structure. The theoretical contributions made by these works in the last ten years or so are assessed. The article concludes with a discussion of whether there is presently a new SSA in the making. JEL classification: B0, B5, E3, N0, N1, N4

The political economy of growth and green politics in Ireland

The current economic crisis arrived at the end of an extended period of accelerated growth in Ireland. The paper will examine the impact for the Irish Greens, including a discussion of the role of the 'Green Political Economy', in the aftermath of that party's rise to power as junior participants of the current coalition government in the republic.

Rediscovering the History of Imperialism: A Reply

Research Unit for Political Economy's (RUPE's) brief historical account here of origins of Marxist theory of imperialism constitutes a crucial corrective to common errors regarding that history. In my article, The Imperialist World System: Paul Baran's Political Economy of Growth After Fifty Years (Monthly Review, May 2007), I began by pointing out that Baran's book was an outgrowth of classical Marxist thought—the ideas of Marx, Lenin, and Luxemburg. At same time it represented a sharp departure from rigid orthodoxy of linear development that had come to characterize so much of socialist (as well as bourgeois) thought—often presented in terms of Horace's phrase, quoted by Marx, the tale is told of you. Baran's treatment of imperialist world system was a startling contribution at time that his book appeared, challenging conventional assumptions of both right and an increasingly calcified leftThis article can also be found at Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at Monthly Review website.

On the History of Imperialism Theory

In his illuminating survey, "The Imperialist World System: Paul Baran's Political Economy of Growth After Fifty Years" (Monthly Review, May 2007), John Bellamy Foster remarks that "The concept of the imperialist world system in today's predominant sense of the extreme economic exploitation of periphery by center, creating a widening gap between rich and poor countries....had its genesis in the 1950s, especially with the publication fifty years ago of Paul Baran's Political Economy of Growth." While acknowledging that traces of such a concept could be found in Marx and Lenin, he feels that "The classical Marxist approach to the worldwide spread of capitalist relations has often been characterized as a crude theory of linear stages of development" whereby the less developed countries would necessarily traverse the same path as the more developed ones. Among the adherents to this view Foster includes Marxists in the Second and Third InternationalsThis article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.