In Pursuit of Inclusive Institutional Growth: A Comparative Pattern of Selected Asian Countries

Abstract

The study compares less developed countries (LDCs) with middle developed countries (MDCs) in the retrospect of Inclusive growth embracement. Fixed effect and random effect (FEM) have been employed to compare the both data sets of countries and then based upon results, policies have been formulated which could accelerate inclusive growth in LDCs. Results suggest that growth acceleration and institutions alone doesn’t have a significant impact on inclusive growth. On the other hand, if growth acceleration occurs in the presence of institutions, it leads to inclusive growth in MDCs& LDCs. Except for health quality, no independent variable has significant impact on inclusive growth in LDCs. Whereas, nearly all independent variables showed significant impact on inclusive growth in MDCs. Unlike MDCs, inclusive growth remains impervious in LDCs, particularly owing to the poor quality of education. Weak institutional structure further adds to the miseries of LDCs. The study suggests that LDCs are trapped at only necessary condition of inclusive growth i.e. GDP per capita income growth. If they wish to achieve high inclusive growth, they must also take care of sufficient condition of inclusive growth i.e. change in their institutional structure. This could be done by following the leading variables to inclusive growth; which includes primarily expansion in Health and educational quality.