Projects

The political economy determinants of economic growth

Objective

This project aims to contribute to the literature on the political determinants of growth in three ways:

1. Attempting to understand the political drivers of within-country growth.
2. Using the conceptual frameworks developed in ESID Working Paper 5 and ESID Working Paper 16 to examine the validity of testable hypotheses derived from the framework and reading of the wider literature on the politics of growth.
3. Looking at what political factors drive the inclusiveness of growth.

Cases

Bangladesh, Ghana, Malawi and Uganda. These four countries have already experienced growth accelerations and are at an ‘incipient’ phase of growth maintenance. The case studies are both retrospective and prospective.

Research questions

1. What are the political drivers of growth accelerations? Are these more related to informal institutions of credible commitment and patron-client networks, and the move from disordered to ordered deals in the institutions space?
2. What are the political drivers of growth sustenance and growth collapses? Are these more related to the emergence (or non-emergence) of formal institutions, and the move in the institution spaces from closed to open deals to rules? What role do the provision of public goods and the overcoming of co-ordination failures play in the ‘locking in’ of growth maintenance and of successful structural transformation?
3. What explains the transition from political equilibrium characterising a growth acceleration to an equilibrium characterising a growth sustenance? To what extent is this transition a function of the structure of rents across the product space, and the evolution of the product space over time? What roles do elite commitment to the emergence of formal institutions and to open deals, and elite investment in bureaucratic capability play in this transition? What is the role of growth coalitions in this transition?
4. How do economic and political institutions jointly evolve from the set of institutions that are causal to growth accelerations to the set of institutions that allow growth to be maintained? To what extent is the transition endogenous?
5. How do poverty and inequality evolve across growth acceleration and growth maintenance? To what extent is the behaviour of poverty and inequality conditional on the emergence of inclusive economic and political institutions, and the inclusiveness of the political settlement?

Methods and research design

The project has four stages.

• Stage I: Periodisation of growth regimes.
• Stage II: Putting together the descriptives.
• Stage III: Country case studies.
• Stage IV: Cross-country econometric analysis.

 
The project combines quantitative and qualitative methods, triangulating the qualitative methods primarily used in the country case-studies with the quantitative methods used in the cross-country analysis. Data collection is in the form of elite and firm interviews, as well as analysis of key policy documents. For the country case-studies, secondary datais also used from government statistical agencies and World Bank assessments/surveys. Context specificity and parameter heterogeneity are applied when testing hypotheses.

How does this project fit within ESID’s research agenda?

This project is part of programme 2, ‘growth and natural resources’. It aims to fill the gap in the literature, which currently focuses on ‘what’ policies and institutions are conducive to growth with a limited understanding of ‘how’ political processes shape the emergence and maintenance of these policies.

Researchers

Books

Prtichett, L., Werker, E. and Sen, K. (eds.) (2017) Deals and Development: The Political Dynamics of Growth Episodes  (Oxford University Press).
Kar, S. and Sen, K. (2016). The Political Economy of India’s Growth Episodes (Palgrave Macmillan).
Rajesh Raj, S. N. and Sen, K. (2016). Out of the Shadows: The Informal Sector in Post-reform India (Oxford University Press).
Kar, S., Pritchett, L., Raihan, S. and Sen, K. (2013). The Dynamics of Economic Growth. A Visual Handbook of Growth Rates, Regimes, Transitions and Volatility (Manchester: ESID).

ESID publications

Krishna, A. (2018). ‘Globalised growth in largely agrarian contexts: The urban–rural divide‘. ESID Working Paper 101.
Behuria, P. (2018). ‘The politics of upgrading in global value chains: The case of Rwanda’s coffee sector‘, ESID Working Paper 108.
Raihan, S., Kar, S. and Sen, S. (2018). ‘Transitions between growth episodes: Do institutions matter and do some institutions matter more?’ ESID Working Paper 99.
Kar, S., Raihan, S. and Sen, K. (2017). ‘Do economic institutions matter for growth episodes?‘ ESID Working Paper 92.
The Bangladesh Paradox: Why has politics performed so well for development in Bangladesh? ESID Briefing 27.
Sen, K., Pritchett, L., Kar, S. and Raihan, S. (2016). ‘Democracy versus dictatorship: The political determinants of growth episodes‘. ESID Working Paper 70.
Behuria, P. and Goodfellow, T. (2016). ‘The political settlement and “deals environment” in Rwanda: Unpacking two decades of economic growth‘, ESID Working Paper 57.
Osei, R. D., Ackah, C. , Domfe, G. and Danquah, M. (2015). Political settlements, the deals environment and economic growth: The case of Ghana‘, ESID Working Paper 53.
Researching the political economy determinants of economic growth: A new conceptual and methodological approach. ESID Briefing 10.
Sen, K., Kar, S. and Sahu, J. P. (2014). ‘The political economy of economic growth in India,
1993-2013‘. ESID Working Paper 44.
Said, J. and Singini, K. (2014). ‘The political economy determinants of economic growth in Malawi‘, ESID Working Paper 40.
Pritchett, L., Sen, K., Kar, S. and Raihan, S. (2013). ‘Trillions gained and lost: estimating the magnitude of growth episodes’. ESID Working Paper 26.
Pritchett, L. and Werker, E. (2012). ‘Developing the guts of a Grand Unified Theory: elite commitment and inclusive growth’, ESID Working Paper 16.
Sen, K. (2012). ‘The political dynamics of economic growth’, ESID Working Paper 5.
How should Uganda grow? ESID Briefing 3.

ESID blog

The persistent challenges of development in Rwanda. 18 April 2019.
The deals make the difference – watch Matthew Tyce on his Deals and Development book chapter 16 November 2017.
Watch Kunal Sen on his new book Deals and Development. What’s the big idea? 16 November 2017.
Watch co-editor of Deals and Development, Eric Werker, on the book’s powerful policy implications. 15 November 2017.
“This will change the way you see economic growth” – Deals and Development book is available for open access! 9 November 2017.
Kar, S. (2017). The reality of doing business in India. 2 November.
Sen, K. (2017). Why have we seen so few developmental states? 5 October.
Deals and Development. 7 August 2017.
WATCH: The India launch of ‘The Political Economy of India’s Growth Episodes’.
EVENT: Experts gather for the release of path-breaking research findings and the launch of a seminal book on growth in India 20 March 2017.
Deals and the politics of growth in Bangladesh: A presentation 20 February 2017.
New book by Kunal Sen and Sabyasachi Kar
Sen, K. (2016). ‘Democracy and growth: How are they related?‘  8 December.
Behuria, P. and Goodfellow, T. (2016). ‘The political determinants of miracle growth in Rwanda‘,  11 November.