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удк ззо. 1 N. G. Barashov
NON-ECONOMIC DETERMINANTS OF ECONOMIC DEVELOPMENT: METHODOLOGY AND INFLUENCE
The paper deals with research methodology of non-economic determinants of economic development. The author considers various theoretical approaches to definition of economic growth factors. Considerable attention is given to studying possible influence of non-economic determinants on quality of economic development.
Key words: non-economic determinants, economic development, psychological, institutional, political, innovative, technological, physical and geographical factors.
Н.Г. Барашов
НЕЭКОНОМИЧЕСКИЕ ДЕТЕРМИНАНТЫ РАЗВИТИЯ ЭКОНОМИКИ: ПРОБЛЕМЫ МЕТОДОЛОГИИ И ВЛИЯНИЯ
В статье анализируются проблемы методологии исследования неэкономических детерминант развития экономики. Рассмотрены различные теоретические подходы к определению факторов экономического роста. Значительное внимание уделяется изучению возможностей влияния неэкономических детерминант на качество экономического развития.
Ключевые слова: неэкономические детерминанты, экономическое развитие, психологический, институционально-политический, инновационно-технологический, физико-географический факторы.
Defining the determinants of economic development has for a long time been one of the topical issues of economics. Studying a mechanism that allows the most efficient use of all factors of economic development is a very difficult problem of the theory of economic dynamics. The theory of economics tries to overcome the technocratic approach to economic development that does not take into account the importance of institutions, cultural traditions and the enormous role of environmental, political, and social determinants. The integration of national economies into global economic relations leads to the growing importance not only of economic development resources.
Various models of economic growth explore the dynamic relationships and reveal the growth mechanism which can be understood as a joint functioning of product market, labor market, technology market, investment market, information and innovation markets. The main determinants of economic growth according to neoclassical models are population growth and technological progress together with accumulation of capital. A common feature that unites a variety of models of economic dynamics based on the Keynesian theoretical tradition is studying the correlation/interdependence/relationship between savings and investments. There are also post-Keynesian models that identify national income distribution as the most important factor influencing the process of capital accumulation. There are models of "zero growth", "limited growth", "balanced growth" and others that examine not only economic but also social and environmental determinants of economic growth [1, p. 76].
Having summarized the results of empirical studies of economic development in recent years it can be concluded that the number of determinants potentially affecting economic development goes far beyond the neoclassical theory and covers the areas which for a long time remained outside/beyond the interests of economists. For example, empirical studies of the sources of economic
growth that used standard production functions could not confirm the decisive role of the accumulation of "physical capital". Consequently the scope of the study of economic growth began to involve more and more not only economic but also social and political problems. The definitions of economic growth determinants (factors) have been reviewed accordingly
The influence of key factors can only partly explain the observed GDP growth rate. In addition to traditional factors (labor, land, capital) national economic growth is influenced by other factors: religious and ethical, institutional, technological, geographical, ecological, social, psychological, economic, transitional character of economy, democracy, political stability, state revenue and expenses, economic policy etc. The global financial crisis that began in 2008 and its manifestations in the Russian economy reaffirmed the importance of non-economic determinants of economic growth.
In our opinion the main non-economic factors of economic development are psychological, institutional, political, technological innovation and physical geography (natural and geographical). This explains the growing attention in recent years to the study of the economic impact of a wide range of parameters, in particular: 1) political (social and political stability, political regime, state economic policy, etc.) 2) system-economic (type of economic system, openness of economy etc.), and 3) geographical (geographical location, climate, mineral resources, human reproduction, etc.) and other factors. Special attention to those factors is also due to the following. The influence of the first and the second group of determinants shows the effectiveness of the state socio-economic policy that usually affects economic growth rate very quickly. At the same time the influence of the third set of determinants does not change with the time that is why it is so important to understand to what extent a particular state development depends on the pre-defined geographical indicators.
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One of the major problems of economic growth factors research is identifying "economic" and "non-econom-ic" determinants of economic development. The differentiation between "economic" and "non-economic" determinants should in our opinion be based on the classification of D. Roderick who identified "direct" and "deep" growth factors [7, p. 6]. The "direct" factors have a direct impact on growth and are defined as factors of production (accumulation of physical and human capital) and productivity growth. The "deep" growth factors are divided into three groups: foreign trade, institutions (which are partly endogenous) and geography (exogenous factor). In our opinion the endogenous growth factors (in this case factors of production and productivity) should be called/ regarded as economic growth factors proper/ purely economic factors of national economic growth, and exogenous factors ("geography") should be regarded as noneconomic factors. As for the partly endogenous factors ("trade" and "institutions") they have a mixed nature/character, i.e. include "economic" and "non-economic" components.
At the same time in our opinion the classification of growth factors by D. Roderick does not fully reflect the depth of the problem. Firstly, calling "trade" an economic growth factor is debatable. On the one hand, the openness of economy and its involvement in world trade relations affect the development rate of this country. Trade liberalization and lowering of trade barriers accelerate economic growth but in countries with transitional economies removal of restrictions can lead to a transient decrease in the GDP growth rate per capita and create imbalances in regional development [5, p. 369]. According to a number of studies/research the fastest growing GDP is in those countries that have vibrant intra-regional trade with a predominance of exports, this is most clearly exemplified in the states of the Southeast Asia [8, p. 117]. At the same time, the experience of Latin America shows that trade liberalization may not have a significant impact on economic growth or even lead to a significant slowdown in growth [6, p. 97]. This situation is explained by the fact that "small economies" are the most open economies and are unable to compete with big trading powers. On the other hand, trade is regarded as an economic process. Trade services are part of the country's GDP and are influenced by various growth factors.
Secondly, such factor as "institutions" requires a more detailed description. In general, institutions can be divided into economic and noneconomic. Economic institutions, in our opinion, can be regarded as partly endogenous growth factors, and non-economic institutions can be regarded as exogenous growth factors. An important place at the same time should be given to the institutional and political factors of economic development.
Thirdly, geographic growth factor also appears heterogeneous. In our opinion, we should distinguish between economic and geographical factor and physical and geographical (natural and geographical) factor which, on the one hand, are interconnected and, on the other hand, have significant differences in the possibility of their regulation. At the same time only physical and geographical (natural and geographical) factor is purely exogenous/proper. The degree/level of urbanization is economic and geographical factor.
Fourthly, the Roderick classification does not account for such important non-economic determinants as psychological and technological innovations.
The study of economic development requires theoretical grounds for distin-guishing between economic and noneconomic factors of national economic growth. However, in our opinion, we should take into account two sides of this process. On the one hand, non-economic determinants of growth are not factors of production in neoclassical economic theory where they do not exist, and economic factors (physical capital, natural resources, human capital) are the traditional factors of production in the neo-classical theory interpretation (capital, land, labor and entrepreneurial skills). On the other hand, economic and noneconomic growth determinants cannot be studied separately since they are closely interrelated. The nature of their relationship is determined largely by the fact that non-eco-nomic determinants are both objective and to a large extent subjective.
In our opinion, the key features of non-economic determinants of economic development are: a) exogenous nature of their influence; b) more indirect mechanism of influence on economic development; c) substitutional nature of their influence during different time periods, and d) temporary nature of their dominance.
It is difficult to find a common denominator for noneconomic determinants: they influence/affect economic growth differently in the short, medium and long run; they are interrelated with economic growth factors differently; their objective or subjective nature influences economic growth differently.
It should be noted that non-economic determinants have indirect and multi-step/multistage nature that leads to a time lag, i.e. the time interval between the non-eco-nomic factors impetus and its direct impact on economic growth. This period of time which is a non-economic time lag is longer in comparison to an economic time lag. No account of these processes leads to/causes delays and inadequacy of measures taken at different levels of management and forecasting of economy.
The International Monetary Fund and the head of the Russian Ministry of Finance Alexei Kudrin at the end of 2008 predicted/forecasted a slowdown in GDP growth in Russia in 2009 from 6.5% to 3.0 - 3.5% due to the global financial crisis affecting the country's economy. In fact, the decline in GDP was over 8% [4, p. 219]. In our opinion slowdown in the Russian economic growth was largely caused by two factors: external economic factor and "internal" factor. In a globalized world the first factor is largely dependent on the anticrisis measures of the international community as well as the Russian government. This factor accounts for not less than two thirds of the total slowdown of GDP. The "internal" factor is determined by the psychology and professionalism of the Russian management accounting for about one third of GDP slowdown [4, p. 221].
It should be noted that this is an expert estimate taking into account the realities of the modern development stage of the Russian economy.
Numerous empirical data leave no doubt that the psychological factor of economic growth is one of the most important not only among the non-economic factors but also in the system of national economic growth determinants as a whole.
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Comparative analysis of the major economic growth concepts according to the criterion of psychological factor influence has produced/allowed the following conclusions.
1. Most alternative concepts of economic growth identify the impact of psychological factor on economic growth as primary.
2. The psychological factor is most important in determining short-term economic growth (in a short time interval, usually up to 3 years). Its significance decreases in determining economic growth in the medium and long term. Thus, in the short and (to a lesser extent) in the medium term psychological growth factor can be characterized as exogenous.
3. The psychological factor in its turn depends on public confidence in the economic and political institutions. Consequently, it can be changed under the influence of institutional, economic and institutional-political factors in the long run. Thus, psychological factor of economic growth in the long-term can be characterized as endogenous.
According to a number of studies institutional characteristics are important determinants of economic development [3, p. 126]. In our opinion, in terms of impact on economic growth the classification of institutions should be expanded by a group of political institutions proper which can be regarded in a broad sense and therefore in some degree "overlap" with the institutional groups discussed above. Therefore, one of the challenges/problems in the studies of economic growth is the distinction of institutional, economic, and institutional and political factors of economic growth.
Development of civil society is an important determinant of the accumulation of social capital, which, in its turn, positively affects institutional development including financial sector We subscribe/adhere to a very widespread in economic theory opinion that institutional factors are important for explaining the long-term economic growth. The attempts to explain differences in growth rates at short intervals by means of institutional variables produce results that are statistically less significant and less stable. In the long run institutional factors are crucial, without improving institutions the growth is unstable, i.e. growth acceleration cannot be made sustainable.
Geographic features of countries and regions are taken into account in econometric studies (especially in cross-country studies) as exogenous determinants of economic growth. Geographic factor of economic growth is taken into account by using variables that reflect physical and geographical features of regions (climate, mineral deposits) as well as economic and geographical features of regions (access to sea trade, continental transport routes, internal infrastructure development, proximity to markets, etc.). Physical-geographical factors have a direct impact on economic growth through productivity, accumulation of capital and labor affecting migration and investment allocation, and indirect impact by affecting trade and in-stitutions development.
The main impact of physical and geographical factor is manifested indirectly i.e. through existing economic and geographic environment and a system of institutional conditions.
We believe that innovation and technological growth factor of the modern economy is an integral factor of economy management. Its elements are present in in each of
the traditional factors of production and serve as criteria of their maturity, efficient functioning and interaction. We consider innovation and technological factor as an important component of growth potential of the labor and capital factors.
It is extremely difficult to estimate the contribution of innovation and technological factor to the national economic growth in the framework of the existing theoretical approaches. In order to identify and evaluate this "new productive force" factors of production should be not isolated but synchro-synthesized and integrated and then we can identify something new that results from interaction, complementing of such traditional factors of production as labor and capital [2, p. 156]. The innovation and technology factor is formed on the fundamentally different technological basis characteristic of the current stage of development in industrialized countries; its main feature is the integration of innovative resources and technological capabilities of its implementation.
Thus, we can establish the nature of the non-economic determinant influence on the dynamics of economic development: the longer is the period under study, the greater is the influence of the factors that are more closely related to the development of productive forces. This means that in the long run the dynamics of economic growth is to a greater extent determined by physical-geographical and innovation and technological factors, in the medium run - by innovation and technological and psychological factors, in the short run - by psychological and institutional and political factors.
In conclusion, the theory of economic development is underdeveloped in the neoclassical paradigm. Overcoming the cyclical crisis of the economy requires improvement of non-economic determinants of economic development because establishing information economy changes the role of individual economic and noneconomic factors.
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