Do political decentralisation and inter state competition favour innovation and growth? There has long been a lively debate surrounding this question, going back to David Hume and Immanuel Kant. This book is a new attempt to test its veracity. The existing literature tends to assume that the...

After evening out all the benefits and costs, the overall optimal level of democracy is about 3.2, on a scale of 1 to 7. On average, fully dictatorial countries have a conditioned growth rate of ¨C1.113 percent, fully democratic countries have a conditioned growth rate of 1.146 while countries...

Developing and transitional economies usually experience high levels of income polarization during the period of transition and rapid economic growth. Understanding and quantifying its effects on the economy is important to developmental strategies. In this paper, we study the effect of income...

We develop an analytical framework to investigate some plausible channels that income inequality affects economic growth. Our empirical study concludes that income inequality has significant negative effect on the rate of GDP growth. Among the channels suggested by recent literature, we find...

The shadow price of a productive good is equal to its money price less its marginal product. As more of the good is consumed, its shadow price rises because of diminishing productivity and the consumer's full income also rises because the marginal product is positive. The direction of the...

This paper uses a new approach to estimate how government expenditures affect the growth rate of real GDP. They affect the growth rate through three channels - total factor productivity, investment and aggregate demand. We find that apart from government investment, all government expenditures...

Land reform in Asian countries is often mentioned as one explanation for the successful economic performance of several Asian countries. Latin American countries did not have land reform and therefore have had lower economic growth. However, this legitimate guess has only scarce evidences. We...