Unlucky or Bad? Economic Policy and Economic Growth”. Discussion Paper 583

Cross-country growth regressions have in recent years become a major growth industry. The most common purpose of this work has been to investigate the determinants of economic growth. But it is also possible to use the existing growth data to determine the extent to which policy choices help or hinder growth. This paper generates estimates of the net contribution of policy to growth for a wide variety of countries. It also provides the ability to “see ” in an almost photographic way what substantial economic reform looks like, to test whether countries have meaningfully reformed. The findings also provide grist for speculation on the virtues of gradual versus dramatic, total economic reform