ABSTRACT
Many countries in the world with a similar time-trend of investment ratio have been experiencing different GDP growth rates. A positive coefficient on the contemporaneous investment ratio in a growth regression may reflect the positive relation between growth opportunities and investment rather than the positive effect of an exogenously higher investment ratio on the growth rate. This reverse effect is especially likely to apply for open economies (Barro 1997: 32-3). It is also on record that the radical changes in property relations (e.g. in many socialist countries) have not produced economic growth as distinct from the capitalist economies, except for a very brief period. Governance, similarly to investment, is a critical input in growth. It is important to recognize that even if global capitalism is a single genus, it becomes a distinct species in each specific country, depending on the latter’s specific history of development that is inseparable from the history of governance. Japanese capitalism, US capitalism or, for that matter, Scandinavian capitalism have distinguishing features of capital and labour relations. In other words, all the developed countries have distinct social structures of accumulation; the relative substantive representation of various class forces in the state and its various institutions and organizations influences the processes.1
