Governments & Economic Growth

Also argues that the initial level is the most important variable and more robust. That is to say that in most cases, the more a country is rich, unless it grows quickly. This hypothesis is known as conditional convergence. He also believes that government size (government, public sector) has little significance. As against the quality of government is very important: governments that cause hyperinflation, the distortion of exchange rates, deficits excessive or inefficient bureaucracy had very poor results. He also added that more open economies tend to grow faster. Finally, the efficiency of institutions is very important: efficient markets, recognition of private property and the rule of law are essential to economic growth