POLICY EVALUATION AND EMPIRICAL GROWTH RESEARCH

This paper explores the implications of the vast body of studies of cross-country growth determinants for the evaluation of alternative policies. Empirical growth studies have experienced a remarkable flow-ering in the last fifteen years, and innumerable insights have unques-tionably been uncovered concerning similarities and differences in the growth experiences of various groups of countries. This empirical work was stimulated by—and, in turn, has been an essential complement to—the revival of growth theory initiated by the seminal papers of Lucas (1988) and Romer (1986). It constitutes one of the great successes of recent macroeconomic research. In addition to identifying empirical regularities in growth, the empiri-cal literature makes numerous claims concerning the impacts of alterna-tive policies on the growth trajectories of different countries. This focus on policy implications is natural given the huge welfare implications of changes in a country’s growth rate. A recent graduate-level textbook remarks “If large cross-sections of country experiences are interesting, it should mainly be because they ought to reveal the global impact of other growth determinants than the proximate factors of increases in pro-ductivity, factors about which we have other sources of evidence. Policy-oriented macroeconomists pay particular attention to the various com-ponents of government interventions ” (Malinvaud, 1998, p. 781). Durlauf and Quah (1999) survey the empirical growth literature and identify an enormous number of policy variables whose growth implications are analyzed in the new empirical literature. Among these I thank Raimundo Soto for useful comments on a previous draft and Chi