Resources

Publication category:
Author(s): Daniel Kaufmann
Publisher: e-Journal USA
Date: June, 2008
Description:
Short paper that touches on the debate about whether economic development is possible without democracy. Although there is an assumed convential wisdom that democracy is a precondition for economic growth, Daniel Kaufmann argues that there is ambiguous empirical evidence about the causal relation between democracy and development. Rejecting the extremes of this relation, the author proposes that a better approach to understand the links between development and democracy should include: (i)a long-term analysis as opposed to the short-term perspective of previous research, and (ii) a focus on a broader concept of democracy that includes freedom of expression, voice and accountability, and that is not limited to elections.

Publication category: Governance indicators
Author(s): Daniel Kaufmann, Aart Kraay and Massimo Mastruzzi
Publisher: World Bank
Date: June 24, 2008
Description:
Abstract excerpt from SSRN: This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2007: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The latest aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 32 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. We also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. We also briefly describe the evolution of the WGI since its inception, and show that the margins of error on the aggregate governance indicators have declined over the years, even though they still remain non-trivial. We find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions.

Publication category: Governance and Growth
Author(s): Stanley Engerman and Kenneth Sokoloff
Publisher: National Bureau of Economic Research
Date: 2005
Description:
Excerpt from SSRN: "Over the last few years, colonialism, especially as pursued by Europeans, has enjoyed a revival in interest among both scholars and the general public. Although a number of new accounts cast colonial empires in a more favorable light than has generally been customary, others contend that colonial powers often leveraged their imbalance in power to impose institutional arrangements on the colonies that were adverse to long-term development. We argue here, however, that one of the most fundamental impacts of European colonization may have been in altering the composition of the populations in the areas colonized. The efforts of the Europeans often involved implanting ongoing communities who were greatly advantaged over natives in terms of human capital and legal status. Because the paths of institutional development were sensitive to the incidence of extreme inequality which resulted, their activity had long lingering effects. More study is needed to identify all of the mechanisms at work, but the evidence from the colonies in the Americas suggests that it was those that began with extreme inequality and population heterogeneity that came to exhibit persistence over time in evolving institutions that restricted access to economic opportunities and generated lower rates of public investment in schools and other infrastructure considered conducive to growth. These patterns may help to explain why a great many societies with legacies as colonies with extreme inequality have suffered from poor development experiences."

Publication category:
Author(s): Stephen Knack
Publisher: World Bank
Date: 2000
Description:
Do higher levels of aid erode the very quality of governance poor countries need for sustained and rapid income growth?

Good governance-in the form of institutions that establish predictable, impartial, and consistently enforced rules for investors-is crucial for the sustained and rapid growth of per capita incomes in poor countries. Aid dependence can undermine institutional quality by weakening accountability, encouraging rent seeking and corruption, fomenting conflict over control of aid funds, siphoning off scarce talent from the bureaucracy, and alleviating pressures to reform inefficient policies and institutions.

Knack's analyses of cross-country data provide evidence that higher aid levels erode the quality of governance, as measured by indexes of bureaucratic quality, corruption, and the rule of law. This negative relationship strengthens when instruments for aid are used to correct for potential reverse causality. It is robust to changes in the sample and to several alternative forms of estimation.

Recent studies have concluded that aid's impact on economic growth and infant mortality is conditional on policy and institutional gaps. Knack's results indicate that the size of the institutional gap itself increases with aid levels.