Economic growth and social indicators: an exploratory analysis

What are the connections between social and political conditions and economic growth? This article explores the uses and misuses of statistical analysis of cross-country data in addressing this question. It shows that social, and economic indicators are linked by webs of association. Such webs of association suggest the possibility of distinct groupings of social indicators with differentiated impacts on economic growth. But such correlations also make it difficult to disentangle causal relationships, especially when theorizing is weak, data are badly behaved, and the number of observations is small. Although under such conditions statistical techniques can help preclude premature generalizations, they are easily overinterpreted. Nonetheless, data analysis can help identify countries that seem exceptions to the genral patterns, where careful case studies may be especially valuable.