Economic Growth in South Asia

We investigate the proximate determinants of economic growth in South Asia from 1996 to 2010. The study is conducted in a panel data framework with a special emphasis on the role of institutions in conjunction with physical capital stock, human capital stock and openness as the major predictor variables. Moreover, we also attempt to ascertain the direct and indirect effects of corruption on the economies in South Asia and thereby estimate the effects of various constraints that could restrict high growth in the region in the near future. Human capital stock and openness are crucial to the region’s economic growth, but institutions need substantial reform if the accelerated growth rates are to be sustained. The impact of physical capital stock is subject to each country’s institutional quality. Corruption is found to have a negative influence on the economies of South Asia, and its interplay with weak institutions tends to magnify this adverse impact. In the future, institutional reform should be directed towards curbing the ill effects of corruption to sustain the growth of South Asian countries.

[1]  P. Mo.  Corruption and Economic Growth , 2001 .

[2]  B. Nunberg.  Civil service quality after the crisis: A view of five Asian cases , 2002 .

[3]  M. Khan.  Patron—Client Networks and the Economic Effects of Corruption in Asia , 1998 .

[4]  P. Romer.  Increasing Returns and Long-Run Growth , 1986, Journal of Political Economy.

[5]  M. Turner,et al.  CHOOSING ITEMS FROM THE MENU: NEW PUBLIC MANAGEMENT IN SOUTHEAST ASIA , 2002 .

[6]  Raimar Richers,et al.  Asian drama, an inquiry intó the poverty of nations , 1969 .

[7]  J. Lambsdorff.  How Corruption Affects Productivity , 2003 .

[8]  K. Sen,et al.  Looking for a break: Identifying transitions in growth regimes , 2013 .

[9]  Richard R. Nelson,et al.  Technical Change in an Evolutionary Model , 1976 .

[10]  Benjamin F. Jones,et al.  The Anatomy of Start-Stop Growth , 2005, The Review of Economics and Statistics.

[11]  D. North.  Institutions, Institutional Change and Economic Performance: Economic performance , 1990 .

[12]  S. Rebelo,et al.  Long-Run Policy Analysis and Long-Run Growth , 1990, Journal of Political Economy.

[13]  J. Ostry,et al.  What Makes Growth Sustained? , 2007, SSRN Electronic Journal.

[14]  A. Alesina,et al.  Income Distribution, Political Instability, and Investment , 1993 .

[15]  James A. Robinson,et al.  Why nations fail ? The origins of Power , Prosperity and Poverty , 2015 .

[16]  D. Weil,et al.  A Contribution to the Empirics of Economic Growth Author ( s ) : , 2008 .

[17]  Udaya Wagle,et al.  Are Economic Liberalization and Equality Compatible? Evidence from South Asia , 2007 .

[18]  N. Kaldor.  Capital Accumulation and Economic Growth , 1961 .

[19]  Nathaniel H. Leff,et al.  Economic Development Through Bureaucratic Corruption , 1964 .

[20]  S. Huntington.  Political Order in Changing Societies , 1969 .

[21]  Simon Kuznets,et al.  Modern Economic Growth: Findings and Reflections , 1971 .

[22]  Khalid Sekkat,et al.  Does corruption grease or sand the wheels of growth? , 2005 .

[23]  A. Cheung.  The Politics of Administrative Reforms in Asia: Paradigms and Legacies, Paths and Diversities , 2005 .

[24]  Philippe Aghion,et al.  The Economics of Growth , 2008 .

[25]  Richard R. Nelson,et al.  Neoclassical vs. Evolutionary Theories of Economic Growth: Critique and Prospectus , 1974 .

[26]  L. Weill,et al.  Is Corruption an Efficient Grease? , 2008 .

[27]  Byung-Yeon Kim,et al.  Both Institutions and Policies Matter but Differently for Different Income Groups of Countries: Determinants of Long-Run Economic Growth Revisited , 2009 .

[28]  S. Haque,et al.  The Diminishing Publicness of Public Service under the Current Mode of Governance , 2001 .

[29]  I. Scott,et al.  Governance and public sector reform in Asia : paradigm shifts or business as usual? , 2003 .

[30]  Axel Dreher,et al.  Corruption Around the World: Evidence from a Structural Model , 2004 .

[31]  Oskar Kurer,et al.  Clientelism, corruption, and the allocation of resources , 1993 .

[32]  Paolo Mauro,et al.  Corruption and the composition of government expenditure , 1998 .

[33]  Syed Ejaz Ghani,et al.  Accelerating growth and job creation in South Asia , 2009 .

[34]  N. Islam.  New Growth Theories: What is in there for Developing Countries? , 2005 .

[35]  R. Grabowski,et al.  Does education at all levels cause growth? India, a case study , 2004 .

[36]  R. Lucas.  On the Mechanics of Economic Development , 1988 .