Diversity in Economic Growth

Diversity in Economic Growth

Global Insights and Explanations

Global Development Network series

Edited by Gary McMahon, Hadi Salehi Esfahani and Lyn Squire

Economists have long relied on cross-country regression analysis to identify the determinants of continued growth, but with only limited success. This book demonstrates the value of a different approach.

Introduction: Re-examining Long-run Growth: Insights from Case Studies

Gary McMahon, Hadi Salehi Esfahani and Lyn Squire

Subjects: development studies, development economics, economics and finance, development economics, international economics


Gary McMahon, Hadi Salehi Esfahani and Lyn Squire This book reports the main results of the Global Development Network’s Global Research Project on ‘Explaining Growth’.1 The project was undertaken in two phases. The first phase consisted of regional analyses of various determinants of long-run growth, including sources, microeconomic determinants, market behavior and political economy, for seven regions spanning the developing and transition world.2 A summary and cross-regional thematic analysis of these studies is available in McMahon and Squire (2003), and the approach and main results of Phase One are summarized in Chapter 1 of this book. In addition to standing as significant contributions in their own right, the regional studies were designed to provide background and a framework for the case studies of 53 developing countries and 25 transition economies undertaken in the second phase of the project. Each of these case studies analyzes the main factors facilitating or inhibiting the country’s long-run growth over the last 20–50 years or the country’s growth during the transition. Two features of the project warrant mention. First, ‘Explaining Growth’ recognizes that there may be many paths toward growth, some leading to faster and broader attainment of sustainable prosperity than others, depending on a country’s conditions. A thorough understanding of the history of growth – and a prognosis of prospects for the future – must therefore be grounded in the specific context of each country. Second, the project thus relies almost exclusively on local researchers, those with the expertise and knowledge to understand the specifics...