Economic Development Econ 385-001 Spring 2014
12:40-1:35pm MWF Grise Hall 440
INSTRUCTOR: William Davis, Associate Professor of Economics
Department of Economics Grise Hall, 418
Office phone/voice mail. 502-745-3123
FAX 270-745-3190 e-mail firstname.lastname@example.org
Office Hours:MWF: 8am-10am, 1pm-4:30 T Th: 8am-11:30, 2:15-4:30 or by appointment
(1) Determinants of Economic Growth: A Cross Country Empirical Study. By Robert Barro. Chps 1 & 2.
MIT Press. 1997.
(2) The Noblest Triumph: Property and Prosperity Through the Ages. Tom Bethell. St. Martin's Press. 1998
(3) Government Failure : A Primer In Public Choice by Gordon Tullock, Arthur Seldon, & Gordon L. Brady. Chps. 1 through 8s
Cato Institute. 2002.
(4) Daily reading of the Wall Street Journal Online (Subscription Required) is required. Other recommended sources include The Economist , New York Times or The Financial Times Latin Business Chronical http://www.latinbusinesschronicle.com/app/frontpage.aspx
(5.). The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. by Hernando De Soto. Basic Books. 2000 and
Chapters 1. Five Mysteries of Capital
3. The Mystery of Capital
4. The Mystery of Political Awareness
5. The Missing Lessons of U S History
7. By Way of Conclusion
(6.) The Revolution in Development Economics. Edited by James A. Dorn, Steve H.Hanke, and Alan A. Walters 1998. Cato Institute. All Chps. omit chps 10, 11,13,15,16,20
(7.) From Poverty to Prosperity: Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity By Arnold Kling and Nick Shultzs. 2009 Encounter Books, New York, NY.
Marginal Revolution Blog Course on Economic Develpment http://mruniversity.com/courses/development-economics-0
The Origins of Power, Prosperity, and Poverty: Why Nations Fail By Daron Acemoglu and James A. Robinson Crown Publishing. 2012
Understanding the Process of Economic Change. Douglas North Princeton Univ. Press. 2005 --various chapters.
Spring 2014 mester at a Glance http://www.wku.edu/registrar/academic_calendars/documents/spring_semester_glance.pdf
Spring 2014 Final Exam schedule https://www.wku.edu/registrar/academic_calendars/spring_final_schedule.php
A Note from your instructor: This course will be primarily a guided readings course in which the student will engage in a significant amount of independent reading/investigation/class discussion on a range of topics related to the the topics of economic growth and development. Special attention will be given to the role of property rights, market based allocative and rationing mechanisms, the rule of law, economic policy making institutions, and the importance of cultural and institutional architecture in the economic development process. Students will be expected to give presentations and participate in discussion on the assigned or independently selected readings in each class meeting.
Course Objectives: At the conclusion of the course the student will have an thorough understanding of the contributions (a nd limitations) of the economic sciences to the problems associated with establishing and sustaining robust economies/societies . The student will have attained a global perspective on the recent history, current status, unique features, and future prospects for representative countries on all continents.
Nobel Lectures and Recipients http://en.wikipedia.org/wiki/List_of_Nobel_laureates_in_Economics
2014 Index of Economic Fredom http://www.heritage.org/index/
2013 Economic Freedom of the World http://www.freetheworld.com/release.html
Economic Freedom of the World An interactive map from The Frazer Institue and The Cato Institute
2008 Index of State Economic Freedom Pacific Research Institute http://special.pacificresearch.org/pub/sab/entrep/2008/Economic_Freedom/map.html
WKU Center for the Study of Capitalism http://www.wku.edu/gfcb/index.php?page=study-of-capitalism
Library of Economics and Liberty http://www.econlib.org/
World Bank "Doing Business Report" http://doingbusiness.org/
CIA World Fact Book
David Wessel interview with Paul Romer on Honduran Charter City http://online.wsj.com/video/a-new-hong-kong-honduras-okays-charter-city/6515F0AD-6F85-48D2-A715-27B3C4E40104.html
Wiki of Econ Blogs
The Marginal Revolution at http://www.marginalrevolution.com/
EconoLog--Kling and Caplan
Econ Journal Watch see for summaries and abstracts of current issues. Currently posted is a symposium which includes articles on:
a. the use of the Index of Economic Freedom in Scholarly Works
b. the contributions of the late Peter Bauer to the understanding of Economic Development
An example of how economists think about climate change http://ageconomist.blogspot.com/2011/06/can-we-really-price-carbonthe-trickle.html
Russ Roberts Interview with Paul Romer on Economic Growth
Interview with Robert Barro on Economic Growth at http://www.econtalk.org/
See list of podcasts on a variety of economic issues at Library of Economics and Liberty Archives
Foundation for Ecnomic Education Podcasts
Recommended Reading/References/Sources: Extensive works/ Classic Works/Contemporary Perspectives
1. An Inquiry Into the Nature and Causes of the Wealth of Nations by Adam Smith
2. The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Topics by William Easterly. MIT Press, July 2001
3. Basic Economics: A Citizens Guide to the Economy by Thomas Sowell
4. Race and Culture: A World View by Thomas Sowell
5. Conquests and Cultures: An International History by Thomas Sowell
6. The Virtue of Prosperity by Denesh D'Sousa
7. Structure and Change in Economic History Dougls C. North (New York: Norton. 1981)
8. The Mystery of Capital : Why Capitalism is Failing Outside the West & Why the Key to Its Success is Right
under Our Noses by Hernando De Soto. Basic Books. 2001.
9. The Rise and Fall of Nations: Economic Growth, Stagflation, and Social Rigidity by Mancur Olson (New Haven, Conn.
Yale University Press, 1982)
10. The Ultimate Resource II: People, Materials, Environment By Julian Simon
11. Peter Bauer: The First Recipient of the Milton Freidman Prize for the Advancement of Liberty See list of works.
12. Cato Institute Milton Friedman Liberty Prize Remembering Peter Bauer See especially the comments by Thomas Sowell,
Bruce Barlett, Paul Craig Roberts, and Amity Shales
13. Capitalism and Freedom by Milton Friedman. University of Chicago Press. 1962
14. Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty First Century by Deepak Lal. Prenceton University Press 2006 ISBN:
15. Central Intelligence Agency World Fact Book
1. An Inquiry Into the Nature and Causes of the Wealth of Nations by Adam Smith
2. World Development Report
3. World Bank
4. International Monetary Fund (IMF)
5. Cato Center for Trade Policies
6. OECD (Organization for Economic Cooperation and Development)
7. NCPA (Nation Center for Policy Analysis See for all related topics
8. European Union Official Web Site
9. European Central Bank
10. Julian Simon and his bet with Paul Erlich
11. Steven Hanke Forbes Archives
12. "In Defense of Free Capital Markets: The Case against a New International Financial Architecture"
BOOK FORUM Tuesday, March 13, 2001 Featuring the author David DeRosa, Yale University School of Management,
with comments by Andrew Berg, International Monetary Fund; Steve Hanke, Johns Hopkins University.
Found at Cato Institute Video Archives (transcript available)
13. International Center for Economic Development
14. Institute for International Economics
16. Tulllock thoughts on democracy Some thoughts on the Problems of Democracy by Gordon Tollock Mercatus Center, George Mason Univ
17. Bibliography of sources on Economic Freedom
18. 19. Works of George BN Ayittey See writings on Africa
20. From Subsistence to Exchange By Peter Bauer
21. Commanding Heights: The Battle for the World Economy
22. Economic Globalization and Culture A Discussion with Dr. Francis Fukuyama
(1998) In this interview, Dr. Francis Fukuyama challenges the view that globalization is leading to cultural homogeneity,
arguing that societies largely maintain their individual characteristic despite economic pressures.
23. London Business School-Entreprenuership Monitor
24. Prof Paul Reynolds' Entreprenuership Report
25. CATO Project on Global Economic Liberty
26. Links to 100 Thinks Tanks Focusing on Eastern European Countries Links to the Center for Institutional Reform and the
Informal Sector at the University of Maryland. Links are listed by country or issue.
27.. Economic Freedom, Prosperity, and Equality: A Survey by Steve H. Hanke and Stephen J. K. Walters
The article compares several institutional indexes for content and explanatory power: Gerald Scully's studies, The Fraser
Institute's Economic Freedom of the World, Freedom House's Economic Freedom Indicators, The Heritage
Foundation's Indices of Economic Freedom, The International Institute for Management Development's World
Competitiveness Yearbook 1996, The World Forum's Global Competitiveness Report 1996. Compares liberty and
prosperity, equality and foreign policy implications. They find that economic freedom is positively correlated with
per-capita GNP. Economic Freedom of the World: 1975-1995 is used as one variable in a comparison of a number of
28. The Russian Economy
29. The Financial Times New Economy Forum
31. Europe Versus USA
32. Digital Freedom Network
33. PERC-Market Based Environmentalism
34. CIA World Fact Book
35. The Market Center Blog
36. Minneapolis Federal Reserve Bank Essay Contest
37. The Adam Smith Institute-London
38.. Center for European Analysis
39. Taxes and Economic Growth
40. World Development Report World Bank. World Development Report 2005 Index of Business Climate
41. Econometrics Help and How To Guide
42. The European Observer
43. Institute for Liberty and Democracy centered in Lima, Peru and started by Herando Desoto.
44. Center for European Policy Analysis
45. The Iraq Index--Brookings Institution
46. Robert Nozick (1938-2002) A summary of his contributions to Philosoply/Economics
47. One Hundred Things you Should Know About DDT and the Malaria Clock
48. Latin Business Chronicle
49. A review of Understanding the Process of Economic Development by Douglas North
50. Corruption Index Transparency International
51. Ranking of Latin American Economies by GDP,
52. Latin Business Chronicle Globalization Index
53. Latin Business Chronicle Business Index
54. Munger Paper on Development and Democracy
55. Learning from Failure :Property Rights, Land Reforms, and the Hidden Architecture of Capitalism By Craig J. Richardson Article on Zimbabwe
56. The Copenhagen Consensus Summer of 2006 conference on the greatest challenges of the globe. See rankings. What is your opinion?
57. Interview with Robert Barro on economic growth at http://www.econtalk.org/
58. Two Views on Global Development: Revive the Invisible Hand or Strengthen a "Society of States"? BOOK FORUM Wednesday, June 7, 2006
12:00 PM (Luncheon to Follow) Featuring Deepak Lal, University of California at Los Angeles, Author, Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-first Century (Princeton University Press, 2006), and Ethan Kapstein, Center for Global Development, Author, Economic Justice in an Unfair World: Toward a Level Playing Field (Princeton University Press, 2006). The Cato Institute1000 Massachusetts Avenue, NWWashington, DC 20001 tv Watch the Event in Real Video audio mic Listen to the Event in Real Audio (Audio Only) ipodDownload a Podcast of the Event (MP3)
59. Reason Foundation Report on Privatization
60. Economic Policy Center at the Mercatus Center at George Mason University.
61. A Classical Liberal Defends Globalization With Nick Schulz Wednesday August 2, 2006
UCLA professor Deepak Lal, author of Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-first Century, explains why it's possible to
embrace globalization without losing one's soul. Also, while acknowledging certain risks inherent in capitalism, he argues that a capitalist economic system is the best
option for poor nations. Found at http://www.techcentralstation.com/ Go to podcast archive.
62. Interview with Nobel Laureate Robert Fogel
63. PERC A market/private property oreinted think tank in Bozeman Montana
64. The Not So Wild, Wild West A story of property rights in the old west.
64. Aid and the Resource Curse World Bank article by Tim Hartford
65. Cato Podcast on Privatization in Peru
66. World Bank Doing Business Report
66. Economic Freedom of the World Frazier Institute
67. Transparancy International Corruption Index
68. Wikipedia on Gini Coeficient s
0. Some articles on the Culture versus Institutions debate The Role of Institutions in Entrepreneurship: Implications for Development Policy
http://www.mercatus.org/Publications/pubID.2209/pub_detail.asp by Frederic Sautet, Mercatus
Center, Georg Mason Univ, Feb, 2005. pdf. and Cato Unbound debate on Revelance of Culture
Articles by A. Kling from Readings(C) Read Chapter 6 , "Taking Stock" of Unerstanding the Process of Economic Change
by Douglass C. North. Princeton University Press. 2005. One copy has been placed in the main office of the Economics Department
which can be checked out for an hour at a time to be copied or studied. Two additional copies have been placed on room reserve at the
reserve desk on the 4th floor of the Helm Library.
71. Policy Analysis Markets http://hanson.gmu.edu/policyanalysismarket.html
72. Articles from the Central Bank of Chile
73. Economic Growth in Latin America and The Caribbean: Stylized Facts, Explanations, and Forecasts Central Bank of Chile, June, 2004
74. World Bank Private Sector Development Blog
75. Read the transcript of the debate in Readings(W)WSJ debate on What Makes an Industrial Revolution Nov 8. WSJ.com published the most recent Econ One on One. This month’s
exchange between two economists (James Robinson, of Harvard University, and Gregory Clark of the University of California, Davis) concerns the Industrial Revolution and deals with the
preconditions necessary for a country to experience massive industrialization
76. How Much Freedom is Necessary for Economic Growth?
77. IQ and Economic Growth
78. What micro loans miss
79. On our current understanding of Economic Growth and Development Governace, Growth, and Development Decision-Making: Reflections by Douglas North, Daron Acemoglu, Francis
fukuyama and Dani Rodrik. World Bank. April 2008
81. The Natural State: The Political Economy of Non-Development by Douglass North, John J Wallis, and Barry R. Weingast
82. Youtube vid --Hernando Desoto on the World Poor http://www.youtube.com/watch?v=XxERamRMt2
83. Strange Maps http://bigthink.com/ideas/21182
84. Night views of N and S Korea http://www.paulnoll.com/Korea/History/Korean-night.html
85. How Ideas Trump Crises by Alex Tabarrok
86. Hans Rosling's 200 Countries, 200 Years http://www.youtube.com/watch?v=jbkSRLYSojo 4 minutes
87. U S Employment/Unemployment Data
88. http://www.hoover.org/fellows/by-expertise sHoover Institute fellows/experts
89. PERC http://www.perc.org/ market based environmentalism center in Bozeman Montana
90. Night views of North Korea http://dmarron.com/2011/12/19/north-koreas-economic-failure-in-one-picture/
91. Hans Rosling on Poverty and Life around the world http://www.youtube.com/watch?v=YpKbO6O3O3M&feature=related 21 minutes
92. Hans Rosling on Population Growth http://www.youtube.com/watch?v=fTznEIZRkLg&feature=related 10 minutes
94. Forbes net migration graphic map for all counties in the U. S. http://www.forbes.com/special-report/2011/migration.html
95. Ronald Coase Institute. Focus on China and Economic Develpment http://coase.org/
96. Cato Center for Global Liberty http://www.cato.org/economicliberty/
Readings PART A
Readings PART B
Readings PART C
Readings PART D
Readings Part E
Readings Part F
Readings Part G
Readings Part H
Readings Part I
385r 12 2
385 summaries 11
New Readings Spr 14
Link to the WKU Center for Applied Economics http://www.wkuappliedeconomics.org/
Class presentation summaries Spring 2012
I. Introduction and Overview
A. Defining and measuring economic development
B. The variation of wealth among nations
C. Historical overview of 20th century trends in economic development: dirigisme vs lazzie faire
II. Alternative Approaches to Economic Development
A. Economic systems and development strategies
B. The role of private and public sectors
C. Sectoral development-agriculture, natural resources, industry, and services
D. Export Led versus import substitution strategies
E. Market-friendly strategies and the importance of approprability
F. The tensions between economic efficiency and equity
III. Human and Non-Human Capital
A. Population growth and economic development
B. Infrastructure and capital formation
C. Emigration and immigration policies
D. Health, nutrition, and education
IV. The Role of International Trade and Finance
A. Balance of payments, exchange rates, external debt
B. Direct and indirect foreign investment
C. Trade associations and blocs
V. Case Studies
A. The relevance of the United States case
B. Europe: Germany, Poland, Yugoslavia
C. The special case of the former Soviet Countries
D. The currency crisis of the 1990's and the lesson learned
E. Asia: The dominance of the Japanese model of development
1. South Korea
2. People's Republic of China
3. Taiwan, Singapore
1. South Africa
2. Recent trends in economic instability the post colonial African Nations
G. Central and South America
1. Mexico and the influence of NAFTA
VI. The Role of Domestic Institutions
A. The legal system and property rights
B. System of Government
C. Tax System
D. Central Bank and Financial Systems
E. Culture and Traditions
V. Domestic Economic Policies
A. Industrial Policy
C. Environmental Policies
VI. International Economic Policy
A. Strategic Trade Policy
B. Currency Regimes
1. Currency boards
2. Currency crises and contagions
C. International Institutions.
1. IMF, World Bank, WTO
D. Tensions between development initiatives and other global issues
1. Environmental issues
2. World resources and species
3. Property rights and sovereignty
Composition of Course Grade Economics 385 Spring, 2014
Mid-term Exam 100
25 weekly Blackboard forum posts 2 points each 50
(Approximately 2 per week collected
weekly. First two posts are due
on Friday, Feb. 4)
Accepted Sources: Wall Street Journal
The Economist Magazine
NY Times Anything from
the The Library of Economics and LIberty
or any threaded disusssion
from My Favorite Blogs or articles from
the "Readings" links (Above)
Class participation/engagement 75
Term paper: (1) must have approved topic
by Feb. 19; (2) must submit outline and bibliograpy
by March 17; (3)finished paper due on or
before April 21. 5 points per day will be
deducted from late papers/updates. Class presentations of
term papers will begin on May 2 40
Paper Presentation 10
Final examination (comprehensive) 150
Total Points 425
Course Grade: accumulated points (90%) 382 or more = A
(80%) 340-381 = B
(70%) 297-339 = C
(60%) 255-296 = D
Less than 255 = F
Make-up exams and quizes will be given only for excused absences.
NOTE: Student Disability Services
In compliance with university policy, students with disabilities who require accommodations (academic adjustments and/or auxiliary aids or services) for this course must contact the Office for Student Disability Services in DUC A-200 of the Student Success Center in Downing University Center. Please DO NOT request accommodations directly from the professor or instructor without a letter of accommodation from the Office for Student Disability Services.
WKU Student Handbook on Academic Dishonesty Refresh your memory on the matter of academic dishonesty.
Course Threads:Things you should be able to write about on the Final Exam
(Necessary but not sufficient conditions for a robust economy)
1. The Rule of Law
a. provision of security internal and external
2. Property rights
a. Legal Appropriability
b. environment for residual claimancy
3. Micro economic policies
b. anti-trust policies
c. entrepreneurial environment
4. Macro economic policies
5. Financial/central bank/monetary system
6. Previous history and pre-existing conditions
7. Trade policies
8. Legal institutions and traditions
8a. Importance of "institutional architecture"
9. Cultural variables
10. The importance of the “Continuity of expectations”
11. Speed of reforms
12. Social delivery mechanisms
13. Environmental issues
14. Equity issues (and the tensions between redistributive urges and development promoting policies )
15. Efficiency and integrity of political institutions
b. presence of parallel markets
16. Population growth/control.
18. Debt relief/aid/loans
19. National government
21. The problem of " rent seeking "
RENT-SEEKING:Cutting yourself a bigger slice of the cake rather than making the cake bigger. Trying to make more money without producing more for
customers. Classic examples of rent-seeking, a phrase coined by an economist, Gordon Tullock, include:
• a protection racket, in which the gang takes a cut from the shopkeeper’s PROFIT;
• a CARTEL of FIRMS agreeing to raise PRICES;
• a UNION demanding higher WAGES without offering any increase in PRODUCTIVITY;
• lobbying the GOVERNMENT for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or
consumers or some other rivals.
Whether legal or illegal, as they do not create any value, rent-seeking activities can impose large costs on an economy.
Source: Economist Magazine
22. The importance of infrastructure and how to provide it
23. Economic efficiency and the concept of Dead Weight Costs
24. The importance of the concept of "adaptive efficiency"
25. What do economists mean when they refer to "inefficicient transfers" of wealth or income
26. The concept of "economic efficiency" as a criterion for judging outcomes.
27. What is the relevance of the concept of "dead weight cost" in assessing the wisdom of public policy?
28. What is the relevance of the "Principle/Agent problem" in the study of economic development?
29. What is the importance of a "system of residual claimancy" in the study of economic development?
30. The idea of "positive sum" world
Some things to know and sample questions for the mid term and final exam: From Readings and Class discussion
-dead weight costs
-What is the relevance of the concept of "dead weight cost" in assessing the wisdom of public policy?
-"a rentier economy"
-"Bifurcation of human behavior"
-"tragedy of the commons"
- "inefficient transfers" of wealth or income
-dirigiste or dirigisme
-tragedy of the commons-
-relationship between culture and institutions
-What is the relevance of the "Principle/Agent problem" in the study of economic development?
-What is the importance of a "system of residual claimancy" in the study of economic development?
-What is the importance of an "efficient capital market" in fostering a robust economy? Provide reasoning with attribution
-The idea of "positive sum" world
-The Rule of Law
- parallel markets
-government as the "night watchman"
-government as an "enterprise association"
-government as a "civil association"
-"Peter Bauer on "western guilt"
-What does Chile’s Penochet and Singapore’s Yew have in common?
-Population growth and economic growth and development
-Relationship between democracy and economic growth and development
-dvantages and disadvantages of "majoritarian democracies"
-religion and economic growth--is there a relationship?s
-according to Douglas North the single most important determinant of economic performance is_________
-in what context may the acquisition of "human capital" (education) be evidence of a "pathology"?
-Alan Waters asserts that property rights are "human rights". Provide the reasoning.
-Alan Waters asserts that property rights must have several characteristics to be effective. List them and provide the accompanying reasoning.
-Alan Waters argues that "bankruptcy can be a "good thing". Provide the reasoning.
-Alan Waters argues that there are important differences in the disciplining mechanisms in the private and public sectors. Explain what he means and the implications of those differences.
-it is argued that secure private property rights foster responsibility. Provide the reasoning.
-Allen Waters states that "competition is the engine of growth". Explain what he means.
-Allan Waters argues the advantages of "failure". Provide the reasoning and explain what that has to do with "entrepreneurship" as a factor in economic growth.
Refresh your memory on the matter of academic dishonesty. WKU Student Handbook http://www.wku.edu/handbook/2009
Suggested Term Paper Topics:
1.)The WTO: : Part of the problem or part of the solution?
2.) Specific study of the economic development of a particular country.
e.g. Ireland, Mexico, South Korea, Argentina,....
3.) Currency boards and dollarization as a stabilization strategy. Look at one or more countries.
4.) Import substitution/Industrial Policy/Strategic Trade Policy as viable growth strategies. Survey literature. Look at one or
5.) Which is more important: Political freedom or economic freedom?
6.) The role and development of the rule of law and/or property rights in the development of one or more countries.
7.) The relationship between economic development and the environment.
8.) The relationship between economic development and endangered species
9.) The IMF: Part of the problem or part of the solution?
10.) The World Bank: Part of the problem or part of the solution?
11.) To what extent does the performance of world equity markets (bourses) forecast the "future" (e.g., see L. Kudlow article) ?
12.) Economics of Conversion of Water to a "Commodity" (see recent article comparing water policies in Australia to those in other countries)
13). Analytical comparison of the indices of economic freedom.
14), Contemporary events in the global economy and the implications for growth and development around the world
15. The Implications of the collapse of the Doha Round of WTO trade negotiations.
16. What accounts for the recent economic performance of China17. What accounts for the recent economic performance of India
18, Similarities in the causes and consequences of the 1997-98 Asian Currency Crisis and Recent Difficulties in Emerging market Economies
19. Robert Higgs "Regime Uncertainty" Hypothesis and its relevance to the depression or current US conditions.
1. Introduction/Overview. Chaps 1 & 2 of Barro book on Determinants of Economic Growth. Must be able to interpret results shown below (will work on this in class)
Barro's Development Equation #1
ECONOMIC GROWTH AND CONVERGENCE
Regression for Per Capita Growth Rate
Dependent Variable: Per Capita Growth Rate
Independent Variable (1) (2)
Log (GDP) -.0254 t=8.19 @.05
Male secondary and higher schooling .0118 t=4.72
Log (life expectancy) .0423 t= 3.08
Log (GDP) *male schooling -.0062 t=3.64
Log (fertility rate) -.0161 t=3.03
Government consumption ratio -.136
Rule of law index .0293
Terms of trade change .137
Democracy index .090 t=3.33
Democracy index squared -.088 t=3.66
Inflation rate -.043 t=5.37
Sub-Saharan African dummy -.0042 t=.97
Latin America dummy -.0054 t=1.68
East Asia dummy .0050 t= 1.21
R2 .58 .60, .52, .47
Number of observations 80 80, 87, 84
Barro Growth Equation #2
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