Chapter 4: Empirical Evidence
Before introducing the unified framework in Chapter 5, let me start with a discussion of some of the empirical issues involving the root causes of economic progress literature. First, I introduce some rough correlations in the data (both diagrammatically and in tabular form). Then I report some of the issues relating to the appropriateness of the levels model in estimation. I follow it up with a discussion on identification which is taken from my earlier work on this topic (see Bhattacharyya, 2009a). In Sections 4.5 and 4.6, I provide evidence on the role of diseases (malaria in particular) in Africa. The main message is that the causal linkages between deep determinants of development and economic development are complex and multidimensional. They also vary across countries and continents. The cross-section regressions are useful in identifying correlation, but may not tell us much about the causal links. The unifying framework in Chapter 5 is an attempt to identify such causal links. 4.1 A QUICK LOOK AT THE DATA The analysis here is based on a dataset which consists of per capita GDP levels, a measure of institutions, measures of geography, a measure of openness, measures of religion and a measure of human capital in (up to) 180 countries. Since I am combining data from different sources, I have to deal with different numbers of observations for different variables. The data typically also come from different years. In case of institutional measures, I use averages in order to capture the long-run effect. The...
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