Developing the Guts of a GUT (Grand Unified Theory): Elite Commitment and Inclusive Growth

Effective States and Inclusive Development Research Centre (ESID) Working Paper No. 16/12

67 Pages Posted: 29 Jan 2014 Last revised: 4 Mar 2015

See all articles by Lant Pritchett

Lant Pritchett

Harvard University - Harvard Kennedy School (HKS); Center for Global Development

Eric Werker

Harvard University - Business School (HBS)

Date Written: December 7, 2012

Abstract

Two key unanswered questions in theories of growth are (a) why some countries successfully initiate episodes of rapid growth while others suffer extended stagnation and (b) why some countries are able to sustain growth episodes over many decades of rapid (or steady) growth while other growth episodes end in reversion to stagnation or collapse. We create an analytical model that is capable of generating both transitory and sustained episodes of accelerated growth. The new feature is a feedback loop from existing economic conditions the pressures on policy implementing 'institutions.' This feedback loop can be positive (with economic growth leading to improved institutions for inclusive growth) or negative (with economic growth leading to worse conditions for further growth by shutting off the inclusiveness of growth and limiting economic opportunity to existing successes). Whether economic elites use their influence activities with political and bureaucratic elites to create more possibilities for economic structural transformation or, conversely, use their power to entrench their privileged position will, to a significant extent, determine whether episodes of rapid growth can be sustained or will peter out, or even be reversed. The mechanisms for elite commitment to sustained inclusive growth are discussed.

Keywords: economic growth, elite commitment, inclusive growth

Suggested Citation

Pritchett, Lant and Werker, Eric, Developing the Guts of a GUT (Grand Unified Theory): Elite Commitment and Inclusive Growth (December 7, 2012). Effective States and Inclusive Development Research Centre (ESID) Working Paper No. 16/12, Available at SSRN: https://ssrn.com/abstract=2386617 or http://dx.doi.org/10.2139/ssrn.2386617

Lant Pritchett (Contact Author)

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

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-4562 (Phone)
617-496-2554 (Fax)

HOME PAGE: http://ksghome.harvard.edu/~lpritch/

Center for Global Development

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5th floor
Washington, DC 20036
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Eric Werker

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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