Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    Developing the Guts of a GUT (Grand Unified Theory): Elite Commitment and Inclusive Growth
    21 Feb 2013Working Paper Summaries

    Developing the Guts of a GUT (Grand Unified Theory): Elite Commitment and Inclusive Growth

    by Lant Pritchett and Eric D. Werker
    Why do some countries successfully initiate episodes of rapid growth while others suffer extended stagnation? Furthermore, why are some countries able to sustain growth episodes over many decades of rapid or steady growth, while other growth episodes end in reversion to stagnation or collapse? This paper represents an initial step in a research agenda aiming to build a unified theory of growth that considers the complex dynamics and varied roles of elites. The analytical model suggested here is capable of generating both transitory and sustained episodes of accelerated growth. As Pritchett and Werker argue, progress on a unified theory of growth would explain, better than current long-run growth theories, the onset of growth episodes. It would also examine how the dynamics of growth interact with existing political and institutional configurations to produce feedback effects on policy and institutions such that some growth episodes end in bust or stagnation while others are continued. Key concepts include:
    • A unified growth theory needs an encompassing model capable of explaining the dynamics of growth rates, both the persistence and the transitions.
    • Conflict across types of elites (political versus economic), within elites (across ethnicity or region or ideology), and in the dynamics of elite formation (the rise of new domains with new elites) all play a role in development dynamics.
    • Part of this research agenda is to recognize that the feedback loops from economic growth on the quality of governmental institutions and state capability can be either positive or negative.
    • It is important to learn how changes can produce rapid growth accelerations even with more or less constant quality of institutions. The source of the initial growth can make that growth process either self-limiting or perpetuating.
    LinkedIn
    Email

    Author Abstract

    Two key unanswered questions in theories of growth are (a) why some countries successfully initiate episodes of rapid growth while others suffer extended stagnation and (b) why some countries are able to sustain growth episodes over many decades of rapid (or steady) growth while other growth episodes end in reversion to stagnation or collapse. We create an analytical model that is capable of generating both transitory and sustained episodes of accelerated growth. The new feature is a feedback loop from existing economic conditions to the pressures on policy implementing 'institutions'. This feedback loop can be positive (with economic growth leading to improved institutions for inclusive growth) or negative (with economic growth leading to worse conditions for further growth by shutting off the inclusiveness of growth and limiting economic opportunity to existing successes). Whether economic elites use their influence activities with political and bureaucratic elites to create more possibilities for economic structural transformation or, conversely, use their power to entrench their privileged position will, to a significant extent, determine whether episodes of rapid growth can be sustained, will peter out, or even be reversed. The mechanisms for elite commitment to sustained inclusive growth are discussed.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: December 2012
    • HBS Working Paper Number: ESID 16/12
    • Faculty Unit(s): Business, Government and International Economy
      Trending
        • 17 Mar 2022
        • Research & Ideas

        Navigating Tradeoffs: How Purpose Becomes a Company's ‘Lighthouse in the Storm’

        • 13 Jun 2022
        • Research & Ideas

        Extroverts, Your Colleagues Wish You Would Just Shut Up and Listen

        • 30 Jun 2022
        • HBS Case

        Peloton Changed the Exercise Game. Can the Company Push Through the Pain?

        • 25 Jan 2022
        • Research & Ideas

        More Proof That Money Can Buy Happiness (or a Life with Less Stress)

        • 18 Apr 2022
        • HBS Case

        Dick’s Sporting Goods Followed Its Conscience on Guns—and It Paid Off

    Find Related Articles
    • Economics
    • Theory

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Accessibility
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College