<p>Can high levels of state capacity be associated with greater resilience to slow growth and deepening output collapses? Using data for 108 developing countries over 1971–2016, we classify five-year periods using a two-dimensional state space based on growth regimes and levels of state capacity. We model transitions between them using a finite state Markov chain and then extend this to take political institutions into account. We find that higher state capacity is associated with more persistent growth regimes and a lower likelihood that output collapses deepen. However, these associations are sometimes weaker than those linked to democracy. </p>

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State capacity and growth regimes

  • Patrick A. Imam,
  • Jonathan R. W. Temple

摘要

Can high levels of state capacity be associated with greater resilience to slow growth and deepening output collapses? Using data for 108 developing countries over 1971–2016, we classify five-year periods using a two-dimensional state space based on growth regimes and levels of state capacity. We model transitions between them using a finite state Markov chain and then extend this to take political institutions into account. We find that higher state capacity is associated with more persistent growth regimes and a lower likelihood that output collapses deepen. However, these associations are sometimes weaker than those linked to democracy.