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:

1

Governments have played a large role in the development process.

2

Democracy is not essential for growth.

3

Free trade is not a prerequisite.

4

Some kept high barriers to imports, even while promoting exports.

5

Successful countries have high levels of savings and investment.

6

Successful countries have flexible markets and "credible" governments.

Countries with 7%+ Growth Rates

1960
Botswana Growth Period Start
2005
Botswana 7% Growth Period End
5000
Per Capita Income
2016 Growth Rate Decline0.8%
1950
Brazil Growth Period Start
1980
Brazil 7% Growth Period End
5000
Per Capita Income
2016 Growth Rate Decline0.9%
1961
China Growth Period Start
2005
China 7% Growth Period End
1000
Per Capita Income
2016 Growth Rate Increase1.8%
1960
Hong Kong Growth Period Start
1997
Hong Kong 7% Growth Period End
30000
Per Capita Income
2016 Growth Rate Increase1.8%
1966
Indonesia Growth Period Start
1997
Indonesia 7% Growth Period End
500
$ Per Capita Income
2016 Growth Rate Increase3.2%
1950
Japan Growth Period Start
1983
Japan 7% Growth Period End
39000
$ Per Capita Income
2016 Growth Rate Increase0.3%
1960
South Korea Growth Period Start
2001
South Korea 7% Growth Period End
13000
$ Per Capita Income
2016 Growth Rate Increase0.9%
1967
Malaysia Growth Period Start
1997
Malaysia 7% Growth Period End
6000
$ Per Capita Income
2016 Growth Rate Increase1.0%
1963
Malta Growth Period Start
1994
Malta 7% Growth Period End
9000
$ Per Capita Income
2016 Growth Rate Increase0.6%
1960
Oman Growth Period Start
1999
Oman 7% Growth Period End
8000
$ Per Capita Income
2016 Growth Rate Decline5.1%
1967
Singapore Growth Period Start
2002
Singapore 7% Growth Period End
26000
$ Per Capita Income
2016 Growth Rate Decline0.4%
1965
Taiwan Growth Period Start
2002
Taiwan 7% Growth Period End
17000
$ Per Capita Income
2016 Growth Rate Increase1.17%
1960
Thailand Growth Period Start
1997
Thailand 7% Growth Period End
3000
$ Per Capita Income
2016 Growth Rate Increase1.00%

Thanks for joining us in our conversation of Global Economic Growth. The views expressed by Michael Stern are those of the researchers alone- we're just summarizing their findings for the information of our readers.

All information for this article obtained from Morningstar, the World Bank, and the Institute of Business & Finance (the six condensed points from the World Bank study).

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.

Victor Schramm, CFS®Analyst & Portfolio Manager

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