Why We Learn Nothing from Regressing Economic Growth on Policies

Seoul Journal of Economics Vol. 25, No. 2, pp. 137-151, 2012

16 Pages Posted: 14 Jun 2012

See all articles by Dani Rodrik

Dani Rodrik

Harvard University - Harvard Kennedy School (HKS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: May 30, 2012

Abstract

Government use policy to achieve certain outcomes. Sometimes the desired ends are worthwhile, and sometimes they are pernicious. Cross-country regressions have been the tool of choice in assessing the effectiveness of policies and the empirical relevance of these two diametrically opposite views of government behavior. When government policy responds systematically to economic or political objectives, the standard growth regression in which economic growth (or any other performance indicator) is regressed on policy tells us nothing about the effectiveness of policy and whether government motives are good or bad.

Keywords: Economic growth

JEL Classification: O4

Suggested Citation

Rodrik, Dani, Why We Learn Nothing from Regressing Economic Growth on Policies (May 30, 2012). Seoul Journal of Economics Vol. 25, No. 2, pp. 137-151, 2012. Available at SSRN: https://ssrn.com/abstract=2083897

Dani Rodrik (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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HOME PAGE: http://www.ksg.harvard.edu/rodrik/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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