Do unfree countries grow faster?

by on July 3, 2007 at 5:33 pm in Political Science | Permalink

Right now they do, check out this chart.  But fear not for the consilience of liberty and utilityKevin Hassett is citing Arrow when he should be invoking Robert Solow.  The poorer countries are playing "catch-up" by adopting Western technologies and business practices.  In the classic Solow model catch-up will give them a higher rate of economic growth but of course they still have a lower level of per capita income.  And why are those same poorer countries playing catch-up more today than they did thirty years ago?

Because they are freer.

1 John Pertz July 3, 2007 at 5:47 pm

Maybe if those in the politically free were a bit more economically free the date wouldnt look so bad.

2 apotheon July 3, 2007 at 6:40 pm

And why are those same poorer countries playing catch-up more today than they did thirty years ago?

Because they are freer.

Also, because those supposedly more-free countries seem to be suffering some tightening of economic controls (in other words, they are catching up faster not only because they’re freer, but also because the competition is less free).

3 pete July 4, 2007 at 2:21 am

Arrow’s theorem applies to dictatorships too. There’s no way of aggregating arbitrary preferences, whether you use voting or not.

Aggregating actual preferences (rather than pathological distributions of preferences) is better done by a democracy than a dictatorship.

4 Pablo July 4, 2007 at 12:40 pm

You might also be interested in this new paper that look at the causes of civil war. The authors argue that the main culprit are poor insitutions – not economic growth.

http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166093&entityID=000016406_20070615144341

5 8 July 4, 2007 at 1:22 pm

Not only are these countries freer, gaining more freedom in the last 20 years than the West, but they added freedom in the right places for economic growth.

China has barely any social safety net, and even public school costs money. If the U.S. abolished the welfare state and cut local property taxes by 50%, how fast would GDP increase annually?

6 JSK July 4, 2007 at 9:17 pm

@8: I don’t know how long term growth would benefit from having a illiterate work
force (having no pesty public education and all). I do know that a major problem
of one of the fast growing asian countries (India) are poorly trained college graduates.

7 happyjuggler0 July 5, 2007 at 2:09 am

The US spends a huge amount per capita on K-12 education, yet has amongst the worst such systems in the developed world. Money spent by government doesn’t equal increased effectiveness.

Virtually all of the faults of the US regarding the poor can be answered by our poor system of K-12 education. This in contrast to those who claim the problem is we don’t steal enough from the rich to give to the poor like Europe does.

8 TGGP July 5, 2007 at 9:17 pm

Virtually all of the faults of the US regarding the poor can be answered by our poor system of K-12 education.
Read Chapter 5 of Freakonomics. I think public education, like virtually all government provided “services” would be inferior to the free market, but don’t expect it to work miracles. The main problem with bad schools is bad students.

9 GVV July 7, 2007 at 7:25 am

TGGP,
I saw your posting only today.
The “flying Geese” model was invented by the Japanese economist Akamaste Kaname.You will get enough reference through googling, including the Wiki meaning.
The other point:
Public education runs in a better manner than the cut throat inflated fees-poor quality combined private education in India.

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