This paper presents evidence that “social capital ” matters for measurable economic performance, using indicators of trust and civic norms from the World Values Surveys for a sample of 29 market economies. Memberships in formal groups—Putnam’s measure of social capital—is not associated with trust or with improved economic performance. We find trust and civic norms are stronger in nations with higher and more equal incomes, with institutions that restrain predatory actions of chief executives, and with better-educated and ethnically homogeneous populations. I.

you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at

Abstract not found

Why is corruption — the misuse of public office for private gain — perceived to be more widespread in some countries than others? Different theories associate this with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. This article analyzes several indexes of ‘perceived corruption’ compiled from business risk surveys for the 1980s and 1990s. Six arguments find support. Countries with Protestant traditions, histories of British rule, more developed economies, and (probably) higher imports were less ‘corrupt’. Federal states were more ‘corrupt’. While the current degree of democracy was not significant, long exposure to democracy predicted

Location and climate have large effects on income levels and income growth through their effects on transport costs, disease burdens, and agricultural productivity, among other channels. Geog-raphy also seems to affect economic policy choices. Many geographic regions that have not been conducive to modern economic growth have high population densities and are experiencing rapid increases in population. At particular disadvantage are regions located far from coasts and ocean-navigable rivers, for which the transport costs of international trade are high, and tropical regions, which bear a heavy burden of disease. Moreover, a large portion of population growth over the next thirty years is expected to occur in these geographically disadvantaged regions. Two centuries after the start of modern economic growth, much of the world’s population remains mired in poverty. Some benefits of modern development, espe-cially gains in life expectancy and drops in infant mortality, have spread to nearly all parts of the world (although huge discrepancies remain). But in material well-being—as measured by gross domestic product (GDP) per capita adjusted for pur-chasing power parity (PPP)—the yawning gaps show few signs of narrowing. In

in the School of Economics at the University of Nottingham. It aims to promote research in all aspects of economic development and international trade on both a long term and a short term basis. To this end, CREDIT organises seminar series on Development Economics, acts as a point for collaborative research with other UK and overseas institutions and publishes research papers on topics central to its interests. A list of CREDIT Research Papers is given on the final page of this publication.

Abstract not found

This paper focuses on three unresolved issues with regard to the impact of trade reform. First, many studies linking trade reform to long run growth are surprisingly fragile. To illustrate the problems with this literature, we examine a popular measure of openness w recently introduced by Sachs and Warner Sachs, J., Warner, A., 1995. Economic reform and the process of global integration. Brookings Papers on Economics Activity 1, pp. x 1--117 . We show that their measure fails to establish a robust link between more open trade policies and long run growth. The second puzzle we identify is the small impact of trade reform on employment in developing countries. Finally, we analyze evidence on the relationship between trade reform and rising wage inequality, focusing on the 1985 Mexican trade reform. Wage inequality in Mexico rose after the reform, which is puzzling in a Heckscher--Ohlin context if Mexico has a comparative advantage in producing low skill-intensive goods. q 1999 Elsevier S...

We investigate whether civil wars have economic causes. The model is based on utility theory, rebels will conduct a civil war if the perceived benefits outweigh the costs of rebellion. Using probit and tobit models the propositions are tested empirically. Four variables, initial income, ethno-linguistic fractionalisation, the amount of natural resources, and initial population size are significant and strong determinants of the duration and the probability of civil wars. One important finding is that the relationship between civil wars and ethnic diversity is non-monotonic; highly fractionalised societies have no greater risk of experiencing a civil war than homogenous ones.

The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run pro-ductivity. The size and direction of the impact may depend on policies, ‘deep ’ structural characteristics and the size of the inflow. The empirical analysis investigates these possibi-lities. Overall we find that aid has been effective in spurring growth, but the magnitude of the effect depends on climate-related circumstances. Finally, we argue that the Collier-Dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate. The usefulness of foreign aid in promoting growth in developing countries has been an area of controversy ever since Rosenstein-Rodan in 1943 advocated for aid to Eastern and South-Eastern Europe. Browsing through successive editions of a leading textbook in development economics provides a telling illustration of how the confidence in aid effectiveness dwindled over the years. In the first edition of ‘Leading Issues in Economic Development’, Meier (1964) dedicated a full 18-page section to the issue of foreign aid. He started out asking: ‘How much aid?’. By the