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The Impact of Intelligence and Institutional Improvements on Economic Growth
Author(s) -
Weede Erich,
Kämpf Sebastian
Publication year - 2002
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/1467-6435.00191
Subject(s) - human capital , endowment , order (exchange) , economics , government (linguistics) , literacy , economic freedom , variable (mathematics) , classical economics , public economics , economic growth , political science , finance , market economy , law , mathematical analysis , linguistics , philosophy , mathematics
Standard indicators of human capital endowment — like literacy, school enrollment ratios or years of schooling — suffer from a number of defects. They are crude. Mostly, they refer to input rather than output measures of human capital formation. Occasionally, they produce implausible effects. They are not robustly significant determinants of growth. Here, they are replaced by average intelligence. This variable consistently outperforms the other human capital indicators in spite of suffering from severe defects of its own. The immediate impact of institutional improvements, i.e., more government tolerance of private enterprise or economic freedom, on growth it is in the same order of magnitude as intelligence effects are. The senior author is responsible for picking a ‘politically incorrect’ topic, i.e., analyzing the impact of IQ or average intelligence. The junior author has done the data compilation and the computations.