Where Did all the Growth Go? External Shocks, Social Conflict and Growth Collapses

Dani Rodrik

No 1789, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper argues that domestic social conflicts are a key to understanding why growth rates lack persistence and why so many countries have experienced a growth collapse after the mid-1970s. It emphasizes, in particular, the manner in which social conflicts interact with external shocks on the one hand, and the domestic institutions of conflict-management on the other. Econometric evidence provides support for this hypothesis. Countries that experienced the sharpest drops in growth after 1975 were those with divided societies (as measured by indicators of inequality, ethnic fragmentation etc) and with weak institutions of conflict management (proxied by indicators of the quality of governmental institutions, rule of law, democratic rights, and social safety nets).

Keywords: Economic; Growth (search for similar items in EconPapers)
JEL-codes: O40 (search for similar items in EconPapers)
Date: 1998-01
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Citations: View citations in EconPapers (95)

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Related works:
Journal Article: Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses (1999)
Working Paper: Where Did All The Growth Go? External Shocks, Social Conflict, and Growth Collapses (1998)
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