About the GGDC
The Groningen Growth and Development Centre was created in June 1992 within the Economics Department of the University of Groningen by a group of researchers working on comparative analysis of levels of economic performance and differences in growth rates. This research programme is one in which Groningen has developed a comparative advantage since the mid-1970s.
The aims of the Centre are:
- furthering high quality research in the field of economic growth and development inside the Netherlands
- increasing cooperation with research workers outside the Netherlands
- increasing the attractiveness of Groningen for visiting scholars in this field
- improving access to external funding for projects and research activity
The activities of the Centre are primarily in the field of research. This research is largely based on a range of comprehensive databases on indicators of growth and development, which the Centre compiles and maintains on a regular basis. The participants of the Centre publish papers, articles and books often linked to these databases. It also organises seminars and conferences, and it submits and supports (joint) proposals to finance research in this field. There is a Working Paper series and the Centre also publishes its own monographs.
The Groningen Growth and Development Centre is affiliated with the research school SOM of the Faculties of Economics and Management and Organization at RUG and with the N.W. Posthumus Institute (the national research institute of economic historians in the Netherlands).
Part of the centre's work is carried out in collaboration with the Economics Program of The Conference Board, which among other things supports the GGDC Total Economy Data Base. GGDC alos collaborates intensively on Research with the National Institute of Economic and Social Researchin London, the The Centre for Efficiency and Productivity Analysis (CEPA) at the University of Queensland (Brisbane, Australia), and the Department of Economic History at the University of Lund (Sweden).
The GGDC participates in various programmes funded by the European Commission. Since 2004 the Centre coordinates the EU KLEMS project on comparative productivity at industry level in the European Union.
At present there are 35 participants in the Centre who are or have been employed by the Economics Faculty, and whose research interests coincide with those of the Centre, and some researchers of other institutes with whom close collaboration takes place in one or more of the main areas of research.
Our research on comparative analysis of levels of economic performance and differences in growth rates can be characterised as follows:
- Use of an Analytical Framework for "Explaining" Performance
Our analytical framework encompasses proximate growth accounting, as used by economists, as well as analysis of the deeper causal role of institutions and policies which characterises analytical economic history.
Intercountry differences in growth rates and levels of performance can be explained in terms of "proximate" causes where the focus is on the relation between output and factor inputs (labour and capital) and technology. Structural shifts in the importance of agriculture, industry and services also play a significant role. In this respect the research follows that of pioneers in the field, such as Colin Clark, Simon Kuznets, Arthur Lewis, Edward Denison, Moses Abramovitz, John Kendrick and Angus Maddison.
However, differences in growth rates and relative levels between countries cannot be entirely explained by such proximate accounts. The impact of institutions, policy and "system shocks" (e.g. wars, famines, etc.) also help explain the variance in relative levels of income per capita and productivity between countries. In this respect our approach is in the tradition of economic historians such as Max Weber, Alexander Gerschenkron, Douglass North and Mancur Olson as well as post-war development economists like Ester Boserup, Albert Hirschman and Arthur Lewis.
- Systematic Empirical Foundations
In our research, intensive use is made of statistics obtained from national accounts, business statistics and employment statistics from national and international bodies. Over the years, intensive contacts have been developed with national statistical offices, the OECD, Eurostat and the World Bank, as well as with academic groups, such as the Penn World Tables at the University of Pennsylvania. Great care is taken in all studies to assess the reliability of statistical information, to analyse the effects of different calculation methods in time series and cross-country comparisons and, above all, to use standardised and transparent methods. In this connection we have found the International Assocation for Research in Income and Wealth particularly useful fora for bringing together the expertise of producers and users of indicators of economic performance.
- A Comparative Perspective
Our research agenda focuses mainly on the economies of nation-states, including advanced capitalist economies, low income countries, as well as former centrally planned economies in Central and Eastern Europe. However, our aim is not "maximalist". Our choice of countries is limited by the availability, or feasiblity of developing reliable, statistical measures. In practice this means that the horizon at present encompasses some 100 countries. Since 1983 a substantial part of the International Comparisons of Output and Productivity (ICOP) project has focused on sectoral cross-country comparisons. The aim of ICOP is to develop the "industry of origin" approach to comparative studies of levels and growth complementary to the "expenditure" approach of the ICP.
- A Long Term Approach
Our studies generally cover periods of several decades up to two centuries. The application of national accounting "tools" in long term studies is supported through the activities of the N.W. Posthumus Institute, in which the economic historians from Groningen have played an important role. We do take part in the European Historical Economics Society, which has also helped to promote long run studies of an empirical nature in Europe.
The geographic scope of our research is wide. It covers five main regions of the world, although many of our studies compare the performance of countries in different regions. In addition, a substantial part of our research focusses on the (comparative) economic performance of the Netherlands.
Advanced Capitalist Countries
- Convergence and Divergence Among Advanced Capitalist Countries
What are the long term factors explaining convergence among high-income countries? How did particular countries achieve economic leadership? What are the reasons behind the US productivity leadership in the twentieth century? Which countries are the most important challengers to the US leadership position, and in which sectors of the economy?
Much of the past and present research of the Centre has focused on these questions. The Centre's Total Economy Database provides extensive series for GDP, Labour input and productivity for up to 100 countries. These issues have been explored in more detail for specific countries, including Germany, Japan, the Netherlands (see below), the UK, the USA and the European Union as a whole. The studies for these countries do not only look at income per capita, but also at differences in labour productivity, augmented factor inputs and total factor productivity as well as institutional differences.
- The Sectoral Productivity Performance of Advanced Countries
An important aspect of the study of convergence and divergence concerns the sectoral performance of output and productivity.The GGDC has developed datasets on output, factor inputs and productivity for approximately 30 countries, in many cases down to the level of 60 industries. Comparisons for manufacturing now cover approximately 30 countries mostly covering the period since 1950. Researchers of the Centre also participated in research of the McKinsey Global Institute which looked in more detail at the reasons for productivity gaps at industry and factory level, and which developed more fully the link with competitiveness. Since 1997 the ICOP research programme is partly sponsored by The Conference-Board.
The expansion of ICOP studies to more sectors of the economy (in particular services) and the analysis of augmented factor input and total factor productivity to more advanced countries could greatly contribute to the discussion on convergence and economic leadership. We made significant progress on this for Brazil, Japan, Korea and Mexico in comparison to the USA, and further work is envisaged for France and Germany.
Historical benchmark comparisons of output and productivity have been made for the end of the 19th century and beginning of the 20th century, in particular for Britain and Germany.
- Historical National Accounts in Europe, North America and Japan
The Centre is intensively involved in compiling historical national accounts encompassing at least a century. The work of Angus Maddison over the past decades is characteristic of our approach towards the creation and use of historical national accounts in a comparative perspective. The research of the Centre in this area is strongly related to that of the N.W. Posthumus Institute, which in early 1993 initiated a research programme entitled "Comparative Historical National Accounts". we have continued this programme at GGDC to improve the usefulness of historical national accounts for comparative studies of growth and levels of economic performance in Europe.
An important aspect of historical national accounting concerns the study of investment, savings and capital stock. Comparative long run studies of this nature were carried out by Maddison, which has been followed up by a research project to expand the comparisons in terms of greater disaggregation and a wider range of countries.
- Long Run Economic Growth of the Netherlands
The Groningen Growth and Development Centre also aims to contribute to the assessment of the economic growth process in the Netherlands during the 19th and 20th centuries. Researchers at the Centre have written extensively on quantitative measures of Dutch economic performance. We also participated in the research project on the "Reconstruction of the Historical National Accounts of the Netherlands 1800-1913", which was led by van Zanden (University of Utrecht) and Fremdling. We also contribute to the debate on the growth performance of the Dutch Economy during recent decades.
AsiaThe Economics of Catch-Up: Comparisons of Output and Productivity in Asia
Over the years, researchers of the Centre have covered an increasing number of Asian countries in their studies. Detailed studies which fit in the Centre's research approach are available for China, India, Indonesia, Taiwan, Thailand, South Korea and Japan. As in the studies for advanced countries the scope of research includes the study of institutional, cultural, demographic and policy factors underlying patterns of growth and development.
Latin AmericaProductivity, Capital Formation and Institutional Change in Latin America
The GGDC has made studies of productivity, real output and purchasing power for some sectors of the economy in Brazil and Mexico. The present aim is to expand these comparisons to all sectors of the economy in these and other Latin American countries. The role of capital in the growth process and the role of institutions and policy in Latin American development is extensively dealt with in these studies.
Central and Eastern EuropeInternational Comparisons of Output and Productivity for Eastern Europe
The first comparisons of the Centre which include Eastern European countries have been realised through a productivity level comparisons for the manufacturing sectors of Czechoslovakia and East Germany. Comparisons for the former Soviet Union and other East European countries (Hungary, Poland) have been published as well.
The core of the researchers in the Groningen Growth and Development Centre consists of permanent staff members and post-doctoral students of the Economics Department of the University of Groningen whose research is more or less entirely part of centre. Ph.D. students in this field are also members of the Centre. Finally, visiting scholars and researchers working on a temporary basis in this research field are also members for the period they are associated with the research of the Centre.
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