Global Economic Growth
What predicates strong economic growth? We look at one World Bank study
The Global Growth Study
In 2008, the World Bank funded a study by Nobel Prize winner Michael Spence to answer questions such as "why have only 13 developing world economies achieved sustained, high growth since World War II?" 1 The 198 page report also asked questions like "Why should there be an end to energy subsidies?" It's a wide ranging study, but we want to focus on one dimension of the study: it's conclusions on global economic growth.
What the World Bank study concluded is 13 countries grew at least 7% a year for 25 years or more. The periods examined all began in 1950 or after. We'll present those 13 countries and some key stats, as well as the six key theses on global economic growth to come from the study.
Global Economic Growth Precepts
The World Bank funded study by former Stanford University Graduate School of Business dean Michael Spence derived six major theses on global economic growth. The study took two years to complete and was presented in 2008. Here are the six points:
Governments have played a large role in the development process.
Democracy is not essential for growth.
Free trade is not a prerequisite.
Some kept high barriers to imports, even while promoting exports.
Successful countries have high levels of savings and investment.
Successful countries have flexible markets and "credible" governments.
Countries with 7%+ Growth Rates
Meet the Author & Portfolio Manager
Victor Schramm is a Certified Fund Specialist (CFS®), with expertise in Mutual Funds & Variable Annuity Separate Accounts. He focuses on long term investing geared toward our annuity clients as a Fee Only Investment Advisor. He lives in Portland, OR.