tag:blogger.com,1999:blog-18156735.post6241382917451842351..comments2023-10-29T17:43:27.054+07:00Comments on café salemba: Determinants of subnational growth, what do we know?Unknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-18156735.post-47692740669978147232008-02-24T17:44:00.000+07:002008-02-24T17:44:00.000+07:00Herbi, I don't know what you meant by "they seem t...Herbi, I don't know what you meant by "they seem to be uninterested in the determinants of subnational growth." In fact, this is what their paper was about. And one of the suggestions was to look closer on what hinders growth, something like Hausmann-Rodrik growth diagnostic approach.<BR/><BR/>You are right about infrastructure doesn't always create growth; maybe the causality goes the other way around. But in terms of econometric testing, we should see a significant correlation. But they in fact found nothing.<BR/><BR/>About WB have been neglecting political factors -- well, the other side of the argument is WB and donors have been too political. But this is another discussion.a.p.https://www.blogger.com/profile/10803193376611057742noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-50285012955883355932008-02-23T20:54:00.000+07:002008-02-23T20:54:00.000+07:00I agree with you.What's interesting is they seem t...I agree with you.<BR/><BR/>What's interesting is they seem to be uninterested in the determinants of subnational growth. I think the logic is growth is increased in earnings this year per earnings last year. Infrastructure indicators may not directly increase earnings. Asking what are the factors that do not cause growth is different from asking what are factors that cause growth. Maybe their approach is asking more to the former than the latter. GE infrastructure usually goes into an environment which already have economic growth.<BR/><BR/>I think WB have been neglecting political factors as long as it have been involved in Indonesia and other countries, however, there is an interesting and important study that would relate to your title determinants of subnational growth by Djankov called DBD. Not demam berdarah but Doing Business Index. DBD correctly assume that entrepreneurship is the reason for growth thus it measured comprehensively the institutional conditions in which business takes place both at the de jure and de facto level. http://www.doingbusiness.org/Documents/CountryProfiles/IDN.pdf<BR/>If autonomy would be make any difference in Indonesia it would be competition between districts in applying a good institutional condition to hatch new entrepreneurs.<BR/><BR/>Djankov, historically, try to integrate the political factors into economic analysis (Claessens, Djankov, Lang,1999) where they analyze who owns east asian corporations. They founded, in 1999, almost 60% of the market capitalization in Indonesia is owned by top 10 families. These features may have directly orindirectly impeded legal and regulatory development. I think this fact can occur in subnational level too.I wonder why Djankov is not the head of the WB.Herbi Rihiratuhttps://www.blogger.com/profile/07959331008340653701noreply@blogger.com