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Home »
Economic Growth Strategy »
Executive Summary »
Economic Growth Strategy in Context »
Economic Growth Transforms Societies »
1. Key to Economic Growth is Rising Productivity »
2. Growth in Developing Countries is in U.S. Interest »
3. Much Has Been Accomplished »
4. Much Has Been Learned »
5. The International Environment for Growth in Developing Countries Has Never Been Better »
6. USAID's Strengths Determine Its Role »
7. USAID Will Promote Rapid, Sustained and Broad-Based Growth »
8. Three Principles Will Guide Economic Growth Programs »
9. Economic Growth in the Framework for U.S. Foreign Assistance »
10. Resources and Resource Allocation »
11. In Conclusion »
References »
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You are here » Home » Our Work » Economic Growth and Trade » Securing the Future » Chart In Conclusion

A Strategy for Economic Growth

11. In Conclusion

The chart presents a visual representation of the framework for economic growth. Economic growth requires continuous growth in productivity. All productivity growth takes place at the firm level---a term that includes producers in all sectors and of all sizes. Firm decision-making and productivity is strongly influenced by the incentives and disincentives created by government policies, regulations, and other aspects of economic governance. The incentives include both macroeconomic and microeconomic policies, including taxes, regulations, contracts, and property rights. These policies are the "drivers" of economic growth and are the primary determinants of the rate and sustainability of economic expansion. While macroeconomic and microeconomic policies and institutions drive the growth process, other factors referred to as "enablers," provide inputs to firms that allow for productivity improvements. The availability of finance, of infrastructure, and of an educated and healthy workforce, for example, can influence the rate and direction of growth. However, they cannot by themselves cause growth to occur where the drivers are not in place. The "drivers" of growth provide the incentives for productivity increases by firms, while "enablers" provide the inputs to firms to increase productivity. A well functioning economic system would allow firms to turn the same resources into ever greater amounts of goods and services over time, thus increasing output, productivity, and incomes.

Thu, 17 Apr 2008 16:53:14 -0500
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Last Updated on: April 17, 2008