NBER Working Papers by Lant Pritchett

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Working Papers

October 2014Asiaphoria Meets Regression to the Mean
with Lawrence H. Summers: w20573
Consensus forecasts for the global economy over the medium and long term predict the world’s economic gravity will substantially shift towards Asia and especially towards the Asian Giants, China and India. While such forecasts may pan out, there are substantial reasons that China and India may grow much less rapidly than is currently anticipated. Most importantly, history teaches that abnormally rapid growth is rarely persistent, even though economic forecasts invariably extrapolate recent growth. Indeed, regression to the mean is the empirically most salient feature of economic growth. It is far more robust in the data than, say, the much-discussed middle-income trap. Furthermore, statistical analysis of growth reveals that in developing countries, episodes of rapid growth are frequen...

Published: Pritchett, Lant & Summers, Lawrence H., 2013. "Asia-phoria meet regression to the mean," Proceedings, Federal Reserve Bank of San Francisco, issue Nov, pages 1-35. citation courtesy of

May 2010Deals versus Rules: Policy Implementation Uncertainty and Why Firms Hate It
with Mary Hallward-Driemeier, Gita Khun-Jush: w16001
Firms in Africa report "regulatory and economic policy uncertainty" as a top constraint to their growth. We argue that often firms in Africa do not cope with policy rules, rather they face deals; firm-specific policy actions that can be influenced by firm actions (e.g. bribes) and characteristics (e.g. political connections). Using Enterprise Survey data we demonstrate huge variability in reported policy actions across firms notionally facing the same policy. The within-country dispersion in firm-specific policy actions is larger than the cross-national differences in average policy. We show that variability in this policy implementation uncertainty within location-sector-size cells is correlated with firm growth rates. These measures of implementation variability are more strongly r...

Forthcoming: Deals versus Rules: Policy Implementation Uncertainty and Why Firms Hate It, Mary Hallward-Driemeier, Gita Khun-Jush , Lant Pritchett. in African Successes: Government and Institutions, Edwards, Johnson, and Weil. 2014

June 2004Growth Accelerations
with Ricardo Hausmann, Dani Rodrik: w10566
Unlike most cross-country growth analyses, we focus on turning points in growth performance. We look for instances of rapid acceleration in economic growth that are sustained for at least eight years and identify more than 80 such episodes since the 1950s. Growth accelerations tend to be correlated with increases in investment and trade, and with real exchange rate depreciations. Political-regime changes are statistically significant predictors of growth accelerations. External shocks tend to produce growth accelerations that eventually fizzle out, while economic reform is a statistically significant predictor of growth accelerations that are sustained. However, growth accelerations tend to be highly upredictable: the vast majority of growth accelerations are unrelated to standard determin...

Published: Ricardo Hausmann & Lant Pritchett & Dani Rodrik, 2005. "Growth Accelerations," Journal of Economic Growth, Springer, vol. 10(4), pages 303-329, December. citation courtesy of

September 1993Good Policy or Good Luck? Country Growth Performance and Temporary Shocks
with William Easterly, Michael Kremer, Lawrence H. Summers: w4474
Much of the new growth literature stresses country characteristics, such as education levels or political stability, as the dominant determinant of growth. However, growth rates are highly unstable over time, with a correlation across decades of .1 to .3, while country characteristics are stable, with cross-decade correlations of .6 to .9. Shocks, especially those to terms of trade, play a large role in explaining variance in growth. These findings suggest either that shocks are important relative to country characteristics in determining long-run growth, or that worldwide technological change determines long-run growth while country characteristics determine relative income levels.

Published: Journal of Monetary Economics, Vol. 32 (1993). citation courtesy of

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