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Some Random Thoughts on Growth. Neil McCulloch Globalisation Team Leader. Growth in per capita. income of the poor. 20%. 10%. Growth in per. capita income. -20%. -10%. 10%. 20%. -10%. y = 1.17x - 0.00. 2. R. = 0.52. -20%. Growth Incidence Curves.

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Neil McCulloch Globalisation Team Leader

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Neil mcculloch globalisation team leader

Some Random Thoughts on Growth

Neil McCulloch

Globalisation Team Leader

Neil mcculloch globalisation team leader

Growth in per capita

income of the poor



Growth in per

capita income






y = 1.17x - 0.00



= 0.52


Growth incidence curves

Growth Incidence Curves

Reflecting big differences in real gdp growth rates

Reflecting big differences in real GDP Growth rates

Cad vs caf




Follow the comparative advantage of the country at every stage of development

As countries develop, their endowments change, as to relative factor prices and so the strategy can also change

CAD: firms in prioritised areas cannot survive in open competitive markets because they are in conflict with the comparative advantages determined by their endowments

  • They need subsidies, but these can’t be afforded, so governments use administrative measures (e.g. Monopolies, suppressed interest rates, overvalued currencies, price controls on inputs

  • These controls then lead to shortages in funds, forex and raw materials

Processes for effective growth policy

  • Ensuring that all voices are heard, including those of the poor and marginalised

  • Accountability mechanisms

  • Dialogue – between public and private sectors

  • Do good technical analysis

  • Monitor, evaluate and kill things that aren’t working

  • Build effective systems for domestic resource mobilisation

Processes for effective growth policy

Gross domestic product or grossly deceptive product

Gross domestic product or ‘grossly deceptive product’?

  • Non-market transactions

    • The ‘care’ economy (underestimation of housewives/husbands work)

    • Subsistence agriculture

  • Distribution, nature and quality of goods produced

  • Leisure time

  • The hidden economy

    • Illegal activities

    • Informal sector

  • Economic ‘bads’

    • No distinction between green and polluting industries

Complements to gdp

Complements to GDP


  • We all know that growth is important

  • We also know that we don’t really know how to create it (far less pro-poor, inclusive, sustainable growth)

  • => focus on building effective processes for deciding growth policy

  • Growth is not the ultimate objective

  • There are several well developed measures which provide more rounded assessments of progress

  • => standardise their use in the UK, EU and G20


Thank you

Thank you

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