Conference Paper

External and internal determinants of development

Abstract: As Rodrik, Subramanian, and Trebbi (2004) point out, factors that affect economic development can be classified using a two-tier approach. Based on a standard production function, inputs such as labor and physical and human capital directly affect per capita income. Much of the empirical cross-country growth literature has focused on these covariates. But the factors themselves are the product of deeper and more fundamental determinants and, thus, are at best proximate factors of economic development. The deeper determinants fall into two broad categories: internal and external. Among the former, institutions and geography have received the most attention, while international trade has been the focus of the latter. The main purpose of this paper is to add an external factor, namely measures of migration, to the existing geography-institutions-trade setup and to evaluate its contribution to the observed differences in per capita income across countries.

Keywords: Emigration and immigration; International trade; Economic development; Developing countries; Geography;

Status: Published in Migration, trade, and development: proceedings of the 2006 conference on migration, trade, and development

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Proceedings

Publication Date: 2006

Pages: 35-59