How to Increase the Long Run Growth Rate of Bangladesh?

This paper develops a framework to analyse the determinants of the long term growth rate of Bangladesh. It is based on the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992) and follows Senhadji’s (2000) growth accounting procedure to estimate total factor productivity (TFP). Our growth accounting exercise showed that growth rate in Bangladesh, until 1990, was due to factor accumulation. Since then, however, TFP made a small positive contribution to growth. An analysis of the determinants of TFP showed that remittances by emigrant workers have negative effects which seem to be due to the loss of skilled labour force. Using these results policy options, to double per capita income of Bangladesh in about 15 years, are discussed.