Publication: Does Insurance Market Activity Promote Economic Growth? A Cross-Country Study for Industrialized and Developing Countries
Abstract
Insurance market activity may contribute to economic growth, both as financial intermediary and provider of risk transfer and indemnification, by allowing different risks to be managed more efficiently and by mobilizing domestic savings. During the last decade, there has been faster growth in insurance market activity, particularly in emerging markets, given the process of financial liberalization and integration, which raises questions about the overall impact on economic growth. This article tests whether there is a causal relationship between insurance market activity (life and nonlife insurance) and economic growth. Using the generalized method of moments (GMM) for dynamic models of panel data for 55 countries between 1976 and 2004, I find robust evidence for this relationship. Both life and nonlife insurance have a positive and significant causal effect on economic growth. For life insurance, high-income countries drive the results, and for nonlife insurance, both high-income and developing countries drive the results.
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Publication Does Insurance Market Activity Promote Economic Growth? A Cross-Country Study for Industrialized and Developing Countries(World Bank, Washington, DC, 2006-12)Insurance market activity, both as a financial intermediary and a provider of risk transfer and indemnification, may contribute to economic growth by allowing different risks to be managed more efficiently and by mobilizing domestic savings. During the past decade, there has been faster growth in insurance market activity, particularly in emerging markets given the process of liberalization and financial integration, which raises questions about its impact on economic growth. The author tests whether there is a causal relationship between insurance market activity (life and nonlife insurance) and economic growth. Using the generalized method of moments for dynamic models of panel data for 56 countries and for the 1976-2004 period, he finds robust evidence of a causal relationship between insurance market activity and economic growth. Both life and nonlife insurance have a positive and significant causal effect on economic growth. High-income countries drive the results in the case of life insurance. On the other hand, both high-income and developing countries drive the results in the case of nonlife insurance.Publication Investor Protections and Economic Growth(2009)Using objective measures of investor protections in 170 countries, I establish that the level of investor protection matters for cross-country differences in GDP growth: countries with stronger protections tend to grow faster than those with poor investor protections.Publication Pro-poor Growth: Explaining the Cross-Country Variation in the Growth Elasticity of Poverty(2008)The aim of this paper is to analyse the cross-country variation in the growth elasticity of poverty across a sample of developing countries during the period from 1990 to 2000. In order to identify variables that may explain the cross-country variation in the growth elasticity of poverty, the paper sets up a theoretical framework. Subsequently, the explanatory power of these variables is tested empirically by panel data econometric analysis. For a sample of 52 low and middle income countries, it is found that the level of initial income inequality, credit available to the private sector, literacy, the extent of business regulations and trade openness are important determinants of the growth elasticity of poverty. Countries that reduce regulatory burdens, improve literacy, increase access to finance, undertake land reforms (asset redistribution), and provide safety nets while liberalizing trade can create more growth and ensure that it is pro-poor. The paper identifies variables (at a cross-country level) that may guide the conscious policies which create pro-poor growth.Publication Low Schooling for Girls, Slower Growth for All? Cross-Country Evidence on the Effect of Gender Inequality in Education on Economic Development(Washington, DC: World Bank, 2002-09)Using cross-country and panel regressions, this article investigates how gender inequality in education affects long-term economic growth. Such inequality is found to have an effect on economic growth that is robust to changes in specifications and controls for potential endogeneities. The results suggest that gender inequality in education directly affects economic growth by lowering the average level of human capital. In addition, growth is indirectly affected through the impact of gender inequality on investment and population growth. Some 0.4-0.9 percentage points of differences in annual per capita growth rates between East Asia and Sub-Saharan Africa, South Asia, and the Middle East can be accounted for by differences in gender gaps in education between these regions.Publication Growth, Inequality, and Social Welfare : Cross-Country Evidence(World Bank, Washington, DC, 2014-04)Social welfare functions that assign weights to individuals based on their income levels can be used to document the relative importance of growth and inequality changes for changes in social welfare. In a large panel of industrial and developing countries over the past 40 years, most of the cross-country and over-time variation in changes in social welfare is due to changes in average incomes. In contrast, the changes in inequality observed during this period are on average much smaller than changes in average incomes, are uncorrelated with changes in average incomes, and have contributed relatively little to changes in social welfare.
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