This is an introduction to the special issue that presents new research on the state and its links to economic and social development. The special issue focuses on the processes of institutional transformation of the state, looking at how fiscal states arise in the developing world. The resulting set of articles presents a variety of approaches, ranging from case studies (at state and regional level), to comparative historical analysis and to macro-quantitative (country and cross-country level) perspectives. The overarching message is that historical, political and institutional factors are key to understanding the process of fiscal states formation and change around the developing world.

We argue that tax revenues and political institutions placing constraints on the executive power may reinforce each other over time and so co-evolve in the long run. This may also bring a shift in the composition of revenues, from taxes levied on a narrow base to broadly levied taxes. To test these hypotheses, we use historical cross-country data covering 31 countries for 1800–2012 and panel time series methods allowing for different forms of country-specific heterogeneity and cross-section dependence. The results offer three main findings. First, executive constraints, whether they are judicial or legislative, and tax revenues are cointegrated. While in the short run they can drift apart, this will be temporary because there is a long-run relationship between the two. Second, evidence of cointegration is strongest for revenues from direct taxes, suggesting that the existence and nature of a long-run relationship may be mainly related to the emergence of broad-based taxation. Third, long-run causality runs mostly from executive constraints to taxation. This is most evident for income taxes. Our findings link Sustainable Development Goals 16 and 17, implying that the goal of promoting inclusive and accountable institutions may work in synergy with that of generating internal resources to finance development goals.

We explored the nexus between the quality of human capital, productivity-enhancing factors, and the quality of institutions in nine Association of Southeast Asian Nations (ASEAN) countries using canonical correlation and principal component analysis of country-level data for 2007–2017 from the World Bank, World Economic Forum, and Penn World Tables databases. We found that an unequal development of human capital in the ASEAN countries is clearly linked to their heterogeneous institutional conditions and that the quality of human capital drives technology absorption and innovation. The four transition economies in the region—Laos, Cambodia, Vietnam, and Myanmar—are facing particularly difficult challenges in developing institutional environments that stimulate human capital development to reach higher levels of knowledge intensity of their economies and achieve the resulting competitive advantages.

Governments’ economic policies need to be based on a coherent view of the role of innovation and productivity in sustaining growth. This article analyses advice on fostering innovation from Australia’s main statutory economics adviser, the Productivity Commission. It argues that the Productivity Commission’s comprehensive 2007 report, Public Support for Science and Innovation, contributed to a policy vacuum hampering government support for innovation for nearly a decade. First, within the Productivity Commission’s understanding of innovation was a contradiction between its required policy targeting criteria and the impossibility of meeting these criteria. Second, the resulting stance on innovation policy was at odds with research and theory on the drivers of innovation and hence growth – particularly innovation systems theories and those based on evolutionary economics. The ensuing innovation policy vacuum suggests that the Productivity Commission placed the abstract ideological ‘purity’ of neoclassical economic theory above empirical exploration of how government can best support Australia’s future economic development. Since late 2015, moves to fill this policy vacuum have included a Senate inquiry, a government department restructure, and the creation of a new Innovation and Science statutory advisory board. Whether these initiatives foster sustained innovation will depend on the extent to which they adopt approaches based on innovation systems or evolutionary economics, and transcend the static neoclassical mindset espoused by the Productivity Commission.

There is renewed interest in levelling up the regions of the UK. The combination of social and political discontent, and the sluggishness of key UK macroeconomic indicators like productivity growth, has led to increased interest in understanding the regional economies of the UK. In turn, this has led to more investment in economic statistics. Specifically, the Office for National Statistics (ONS) recently started to produce quarterly regional GDP data for the nine English regions and Wales that date back to 2012Q1. This complements existing real GVA data for the regions available from the ONS on an annual basis back to 1998; with the devolved administrations of Scotland and Northern Ireland producing their own quarterly output measures. In this paper we reconcile these two data sources along with UK quarterly output data that date back to 1970. This enables us to produce both more timely real terms estimates of quarterly economic growth in the regions of the UK and a new reconciled historical time-series of quarterly regional real output data from 1970. We explore a number of features of interest of these new data. This includes producing a new quarterly regional productivity series and commenting on the evolution of regional productivity growth in the UK.

This paper builds upon Bartelsman, Lopez-Garcia, and Presidente (2018) and provides empirical evidence on the cyclical features of labour reallocation in a sample of European Union (EU) countries over the Great Recession and the slow recovery. The analysis makes use of cross-country micro-aggregated data on firm dynamics and productivity from release 6 of the ECB CompNet database. While productivity-enhancing reallocation generally is counter-cyclical, with a stronger effect providing a silver lining in downturns, it was weaker during the Great Recession in the EU, but reverted back to more normal patters in the most recent years.

The high-temperature- and moisture-dependent behaviour of synthetic kanemite (NaSi2O4(OH)·3H2O or SKS-10) has been studied by in situ powder X-ray diffraction. Heating experiments in the range between ambient temperatures and 250°C confirm earlier investigations that the dehydration of kanemite occurs in two steps. According to our results the two different reactions start at ∼30 and 75°C. The dehydration products have the following compositions: NaSi2O4(OH)·H2O (monohydrate) and NaSi2O4(OH), respectively. The crystal structures of both phases have been solved at ambient conditions ab initio from laboratory powder diffraction data using samples that have been carefully dehydrated at 60 and 150°C, respectively, and refined subsequently by the Rietveld method. Basic crystallographic data are as follows: NaSi2O4(OH)·H2O: orthorhombic, space group Pna21, a = 7.2019(1), b = 15.3252(2), c = 4.8869(1) Å, V = 539.37(1) Å3, Z = 4; NaSi2O4(OH): monoclinic, space group P21, a = 6.3873(1), b = 4.8876(1), c = 7.1936(1) Å, β = 93.36(1)°, V = 224.19(1) Å3, Z = 2. Both compounds belong to the group of single-layer silicates based on Si2O4 (OH) sheets. The sodium cations are located between the tetrahedral sheets and are surrounded by oxygen atoms from silicate anions and/or water molecules. Depending on the dehydration step the coordination numbers of the alkali ions vary between six (kanemite) and five (NaSi2O4(OH)). Kanemite and its two dehydration products show structural similarities which are discussed in detail. Moisture-dependent diffraction studies at ambient temperatures indicate that kanemite is stable between 10% and at least 90% relative humidity. Below the lower threshold a transformation to the monohydrate phase was observed. Dehydration and rehydration as a function of humidity is reversible. However, this process is combined with a significant loss of crystallinity of the samples.

The ‘productivity puzzle’ – the substantial drop in productivity in the UK since the onset of the financial crisis in 2008 – has exercised economists and policymakers alike. The loss in productivity levels, mainly output per hour, should have been restored by now and the trend growth should have been recovered, or even exceeded. Instead after a very sharp fall, much faster than many of our competitors, it has only recently started to rise again, but at a stubbornly slow rate and at the time of writing stood some 2 per cent below its pre-recession levels. So although we are likely to get back to where we were pretty soon, it is possible that the gap, with where we should have been on pre-recession trends, continues. The Bank of England calculates this gap could stay as high as 16 per cent or even widen if the rate of productivity increase does not return to normal. This is bad for the economy and especially bad for innovation, investment, growth and competitiveness. This paper examines possible explanations and offers some possible answers. It sides, in the end, more with those that argue that demand deficiency looks like being at least a part of the explanation, but acknowledges that changes in the structure and destination of employment, since the recession started, have also played a role.

There is an enduring belief by UK policymakers that a large higher education sector is an important driver of long-run economic growth, which has been part of the narrative since the Robbins Report. Back then, there was plenty of conjecture and assumption, but strikingly little concrete evidence to support such a belief. This paper asks whether the evidence base has strengthened in the 50 years since it was published. It looks at a number of different growth equation specifications and, using international education data, attempts to draw out the contribution of both the number of, and the growth in, graduates since the 1960s. There are three main findings. Firstly, many growth relationships, including those estimated elsewhere in the literature, are quite sensitive to the countries included – which often depends on the variables used – and time period of analysis. I argue that, given these issues, growth equations should always be treated with caution. Secondly, and remembering this caveat, neither the increase nor the initial level of higher education is found to have a statistically significant relationship with growth rates both in the OECD and worldwide. This result is robust to numerous different specifications. Thirdly, there is some evidence, consistent with the existing literature, that levels of technical skills at the end of compulsory education matter. The employment of higher level technical skills (proxied by the number of employed researchers in an economy) is also a strong predictor of growth. This gives a possible mechanism linking the output of (some) of the higher education sector with economic growth. However, it does not imply that mass higher education necessarily leads to higher growth. This depends on the skills produced by an expanding tertiary sector and their utilisation (or underutilisation) in the jobs available to increasing numbers of graduates.

This paper examines the dynamics of the skill supply and its incidence on economic growth in the presence of education policies. When there are indivisibilities in the financing of human capital, small differences in the initial distribution of skills may greatly affect the stationary distribution: the economy may end up in a “low skill trap”, or in a high skill equilibrium. The model implies that for some ranges of initial distributions there will be intergenerational immobility. Finally, cross-country differences in long-term macroeconomic adjustment to education policies may be attributed, among other factors, to the existence of a congestion effect in the education system.

Une grande partie des politiques de développement repose sur l’envoi de transferts aux économies connaissant des difficultés de développement. Si ces aides semblent favorables au bien être des agents, leurs effets sur la croissance de long terme des économies restent ambigus ou parfois décevants. L’objectif de cet article est de contribuer à mieux cerner les conséquences d’une politique de transferts sur la dynamique de long terme d’une économie. Pour cela, on utilise un modèle à générations imbriquées, au sein duquel sont présents un secteur d’accumulation du capital humain et un processus d’héritage de niveau de vie. L’analyse numérique du modèle permet de montrer que selon l’importance des transferts et la préférence des agents pour le loisir, la politique d’aide peut se révéler favorable ou défavorable à la croissance de l’économie.

Nous présentons dans cet article un modèle à générations imbriquées avec capital humain qui permet de rendre compte de la diversité des systèmes publics de retraite par répartition. Notamment, ce modèle intègre la possibilité que les droits à pension d’une personne soient calculés soit de manière forfaitaire soit en fonction de l’historique de ses salaires et de la durée de sa période salariale. Dans ce dernier cas, de loin le plus rencontré concrètement, si la durée minimum légale de cotisation donnant droit à une pension à taux plein n’est pas trop élevée, le système de retraite peut être favorable à la croissance économique en incitant les agents à investir davantage en capital humain. Ce mode de calcul des droits à pension peut donc s’avérer économiquement profitable et dominer en tout cas le mode de calcul alternatif basé sur le versement d’une pension forfaitaire. Nous déduions également les conséquences de ce mode de calcul sur les ajustements à opérer face à différents types de structure démographique.