Global Economic Growth- World Bank Study on Economic Growth

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:

Governments have played a large role in the development process.

Democracy is not essential for growth.

Free trade is not a prerequisite.

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

Successful countries have high levels of savings and investment.

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

Learn More About Us