Thinking Aloud: Volume I, Issue 5

The October 1, 2014 issue of Thinking Aloud focuses on institution and growth. The first article, in the context of high economic growth in Bangladesh during 1990s and 2000s, despite challenges in institutional development, puts forward the question whether there was any growth ‘paradox’ in Bangladesh, and tries to argue that there was actually no ‘paradox’. The second article, using cross-country econometric models and six institutional variables, argues that institutional developments have significant positive effects on capital accumulation and total factor productivity, and shows that reforms in institutions have higher returns in South Asia than in East Asia. The short interview of Professor Kunal Sen reemphasizes the importance of institutions for economic growth, highlights the kind of institutions which affect economic growth more than others, and underscores the type of institutional reforms needed in countries like Bangladesh for economic growth to sustain. The short article on “The ICRG Rating System of Political Risks” provides a brief overview of 12 political risks variables, their definitions and the range of score values.