World Bank2012-03-192012-03-192011-05-26https://hdl.handle.net/10986/2756The objective of this report is to identify the main obstacles to longer term growth in Jamaica. The report takes a holistic approach, examining a large set of economic and social factors that may be hindering growth and filtering them through a growth diagnostic analysis to narrow the focus to those that constrain growth the most. Building on the results of the growth diagnostic analysis, the report then discusses each key obstacle and identifies possible reform scenarios to unlock growth in Jamaica. The report also examines how the country might further accelerate growth through private sector development. This Country Economic Memorandum assesses the key causes that have stalled Jamaica's economy over the past four decades and presents recommendations to unlock its growth potential. There is a basis for optimism in that Jamaica has had political stability, high rates of private investment, significant reduction of poverty in rural and urban areas, and improved income distribution. Nonetheless, this report shows that, since independence in 1962, long-term economic growth has been disappointing and underperformed most other countries. The findings of this study indicate that Jamaica's disappointing economic performance is traceable to low productivity caused by (i) deficiencies in human capital and entrepreneurship that are due to high migration rates and to deficiencies in the quality of education and training offered to the labor force, among other factors, (ii) a high rate of crime, and (iii) distortionary tax incentives combined with 'enclave' development that does not spill over to the rest of the economy.CC BY 3.0 IGOACCOUNTANTACCOUNTINGACCOUNTING STANDARDSADVERSE EFFECTSAGRICULTUREALLOCATIONALLOCATION OF CAPITALBENCHMARKINGBINDING CONSTRAINTBRAIN DRAINBUDGETINGBUREAUCRACYCAPITAL FLOWSCAPITAL FORMATIONCAPITAL GOODSCAPITAL STOCKCDFCOMMON LAWCOMPARATIVE ADVANTAGECOMPETITIVENESSCONFEDERATIONCONTINGENT LIABILITIESCORPORATE TAX RATESCORPORATIONCROWDING OUTCURRENCYDEBTDEBT MANAGEMENTDEBT SERVICEDEBT SWAPDEBT-SERVICING COSTSDEMOGRAPHIC TRANSITIONDEVELOPMENT BANKDEVELOPMENT STRATEGYDISPUTE RESOLUTIONECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC HISTORYECONOMIC IMPACTECONOMIC PERFORMANCEECONOMICSELASTICITIESELASTICITYEMPIRICAL STUDIESENABLING ENVIRONMENTENVIRONMENTALEQUIPMENTEXCHANGE CONTROLSEXCHANGE RATESEXPENDITUREEXPENDITURESEXPORT PERFORMANCEEXPORT SHAREEXPORTERSEXPORTSFEMALE LABORFEMALE LABOR FORCEFINANCIAL MANAGEMENTFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL STATEMENTSFISCAL DEFICITSFISCAL DISCIPLINEFISCAL POLICIESFISCAL POLICYFIXED CAPITALFIXED INVESTMENTFOREIGN DIRECT INVESTMENTFOREIGN INVESTMENTFREE TRADEGDPGDP PER CAPITAGINI COEFFICIENTGOVERNMENT GUARANTEESGOVERNMENT POLICIESGOVERNMENT REVENUEGOVERNMENT REVENUESGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROSS FIXED CAPITAL FORMATIONGROSS VALUEGROWTH POTENTIALGROWTH RATEHUMAN CAPITALHUMAN RESOURCESINCOMEINCOME DISTRIBUTIONINCOME TAXINCOME TAXESINFLATIONINNOVATIONINTELLECTUAL PROPERTYINTEREST RATESINTERNATIONAL MARKETINVESTINGINVESTMENT ALLOCATIONINVESTMENT CLIMATEINVESTMENT RATESLABOR FORCELABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKET INDICATORSLABOR MARKETSLABOR PRODUCTIVITYLABOURLABOUR FORCELACK OF TRANSPARENCYLEGAL SYSTEMLEGITIMACYLIBERALIZATION OF TRADELIVING CONDITIONSLOCAL ECONOMYMANPOWERMARKET ECONOMYMARKET SHAREMATHEMATICSMINIMUM WAGEMOTIVATIONNATIONAL SAVINGNATURAL DISASTERSNOMINAL INCOMEOCCUPATIONSORGANIZATIONAL STRUCTURESPERVERSE INCENTIVESPOLITICAL ECONOMYPOLITICAL STABILITYPOTENTIAL INVESTORSPRIVATE FINANCINGPRIVATE INVESTMENTPRIVATE SECTORPRODUCTIVE INVESTMENTPRODUCTIVITY GROWTHPUBLIC DEBTPUBLIC FINANCESPUBLIC INVESTMENTPUBLIC SECTORPUBLIC SPENDINGRATE OF RETURNRATES OF RETURNREAL GDPREAL INTERESTREAL INTEREST RATESREAL WAGESREMITTANCESRENT-SEEKING BEHAVIORREPUBLICRETIREMENTRETURNSRISK AVERSERULE OF LAWSAFETYSCIENTIFIC RESEARCHSKILLED LABORSTATE INTERVENTIONTAXTAX EXEMPTIONSTAX INCENTIVESTAX POLICIESTAX POLICYTAX RATETAX RATESTAX REGIMETAX REVENUETELECOMMUNICATIONSTOTAL FACTOR PRODUCTIVITYTRADE UNIONSUNEMPLOYMENTUNEMPLOYMENT RATEUNEMPLOYMENT RATESUNSKILLED WORKERSVALUE ADDEDWAGE DISTRIBUTIONWORLD TRADE ORGANIZATIONWTOWorld Bank10.1596/2756