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Political Institutions, Policymaking Processes, and Policy Outcomes: The case of Colombia Research Proposal Presented by Fedesarrollo to the Inter American Development Bank Research Team

By Mauricio Cárdenas, Roberto Junguito and Alberto Alesina (external Advisor

Abstract

Until recently, Colombia was regarded as a success story in terms of economic growth and stability. To a large extent, this reputation was based on the macroeconomic performance between the 1930s and 1970s, which was characterized by increasing GDP growth rates combined with a reduction in volatility (measured by the standard deviation in growth rates). In fact, GDP growth rose to an annual average of 5.8 % during the 1970s from 3.8 % during the 1930s. The standard deviation in the growth rate fell from around 3 % during the 1930s and 1940s to 1 % during the 1960s. The economics profession, both nationally and internationally, impressed with this performance, considered Colombia as a paradigm of macroeconomic management, praising the combination of able technocrats and sound institutions as the key driving elements of this success story. In contrast, economic growth has not been encouraging since 1980. Average annual GDP growth fell 3.4 % during the 1980s and 2.8 % during the 1990s. At the same time, growth rates became highly volatile: The standard deviation in annual growth was 3 % during the 1990s, the highest in the postwar period. There are several competing hypotheses in the recent literature that try to explain wh

Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.198.78
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