Regressions 1.4 to 1.7 include additional variables proxying for the other factors
affecting economic growth. Regression 1.4 includes continental dummies for the
African and Latin American countries. Regression 1.5 includes variables that
measure political instability, such as per capita political assassinations per year, a
dummy for wars on the national territory, and a measure of political rights. The
measure of political rights is a subjective index for freedom of speech and the
press, freedom to run for office and vote in each country, obtained from Gastil
(1987) and other issues. In regression 1.6 we also controlled for the level of
financial development and the inflation rate. Financial development is proxied by
the ratio of the liquid liabilities of the financial system to GDP, which for most
countries equals M2/GDP. King and Levine (1993) show that this measure is
closely associated with long-run growth. Finally, regression 1.7 includes a measure
Regressions 1.4 to 1.7 include additional variables proxying for the other factorsaffecting economic growth. Regression 1.4 includes continental dummies for theAfrican and Latin American countries. Regression 1.5 includes variables thatmeasure political instability, such as per capita political assassinations per year, adummy for wars on the national territory, and a measure of political rights. Themeasure of political rights is a subjective index for freedom of speech and thepress, freedom to run for office and vote in each country, obtained from Gastil(1987) and other issues. In regression 1.6 we also controlled for the level offinancial development and the inflation rate. Financial development is proxied bythe ratio of the liquid liabilities of the financial system to GDP, which for mostcountries equals M2/GDP. King and Levine (1993) show that this measure isclosely associated with long-run growth. Finally, regression 1.7 includes a measure
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