How economic growth and politics interact


Researchers from Stanford University study the relationship between fast and continued economic growth and the role of institutions. Their research is part of the Improving Institutions for Pro-Poor Growth (iiG) research programme and uses thirteen, mainly Asian, case studies. They find that although there is no one path to growth, leaders play a key role in the growth and development of developing economies.The research suggests that leaders should:

  • Base their economic policies on an open economy approach. This means reducing barriers to trade and encouraging exports.
  • Make sure that political structures exist that will give the open economy approach time to succeed through creating a stable political environment. A stable political environment may require the creation of a one party system or a voting system that creates a dominant party.
  •  Sustain economic growth by adapting to changes and to new interest groups so that the open economy policy can continue to succeed. They can do this by making special political and economic allowances to specific groups, and including diverse interests in the political process.


iiG Briefing Paper 10, CSAE Economics Department, University of Oxford, Oxford, UK, 2 pp

How economic growth and politics interact

Published 1 January 2010