IESET.
Hypotheses·growth·frontier_income_volatility_state_allocation

Across middle-income and catch-up economies 1980-2020, high state-directed allocation — measured by state-enterprise share of output, directed-credit intensity, and public-investment-driven growth — is associated with larger boom-bust cycles after middle-income status is reached, even when early catch-up growth is strong.

The pre-registered claim is that countries in the top tercile of state-allocation intensity show at least 1.5 percentage points higher standard deviation of GDP growth and at least twice the crisis frequency in the post-middle-income window than bottom-tercile peers, after controlling for resource dependence, financial development, and initial income.

REFUTEDengine/runs/frontier_income_volatility_state_allocation

REFUTED — coef=-0.496 (sign opposite claim +), p=0.000422

confidence cueThis test cuts against the claim as written or misses its pre-declared threshold.

policy briefNeeds review

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The data did not support the prediction. coef=-0.496 (sign opposite claim +), p=0.000422

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 61 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for country and decade.

what was measured
What changed
  • State allocation government consumption proxy
  • State allocation intensity index
What we checked
  • Income growth volatility
  • Crisis frequency
  • Output loss post boom
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

0 input datasets, 4 unresolved missing series, provenance status: incomplete.

Results

engine/runs/frontier_income_volatility_state_allocation
1007550250198020002020CHNINDIDNBRAMEXARGCOL
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show gdp_growth_volatility across 61 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for frontier_income_volatility_state_allocation. Published chart will be generated from engine/runs/frontier_income_volatility_state_allocation/chart_data.json.

Who has skin in the game — schools predicting on this

11 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDschool refutedChicago School Monetarismwins if SUPPORTEDschool refutedClassical Liberalwins if SUPPORTEDschool refutedDemocratic Socialism (Bernsteinian revisionism + modern)wins if REFUTEDschool supportedStructuralist / Developmentalistwins if MIXEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if MIXEDpartial/no-callNew Institutional Economicswins if MIXEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if REFUTEDschool supportedOrdoliberalism (Freiburg School)wins if SUPPORTEDschool refutedPost-Keynesianwins if REFUTEDschool supportedSocial Democraticwins if REFUTEDschool supported

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:52:49Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across middle-income and catch-up economies 1980-2020, high state-directed allocation — measured by state-enterprise share of output, directed-credit intensity, and public-investment-driven growth — is associated with larger boom-bust cycles after middle-income status is reached, even when early catch-up growth is strong. The pre-registered claim is that countries in the top tercile of state-allocation intensity show at least 1.5 percentage points higher standard deviation of GDP growth and at least twice the crisis frequency in the post-middle-income window than bottom-tercile peers, after controlling for resource dependence, financial development, and initial income.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the coefficient on state-allocation intensity is not positive and significant at p<0.05 on growth volatility, OR (b) the top-tercile vs bottom-tercile crisis-frequency ratio is below 1.3, OR (c) state-allocation intensity is negatively associated with volatility (suggesting state direction stabilises growth). A "developmentalist stabilisation" reading wins if (c) holds.

formal test & threshold
test:      panel_fe_state_allocation_on_growth_volatility_and_crisis_frequency
threshold: panel_FE_beta(state_allocation → growth_volatility) > 0 at p<0.05 AND top_tercile_crisis_freq / bottom_tercile_crisis_freq >= 1.50 AND state_allocation_coefficient_on_volatility >= 0.5 pp_sd

Method

Template
panel_fe
Fixed effects
country, decade
Clustering
country
Sample
61 countries · 1980 – 2020
Evidence type
associational

Panel FE with growth-volatility and crisis-frequency outcomes on state- allocation intensity. Identification from within-country variation in state-allocation episodes (e.g. Brazil BNDES surge 2007-2014, Malaysia GLC expansion, China post-2008 stimulus, Russia state-enterprise consolidation). Event-study around middle-income threshold crossing. Robustness: exclude commodity exporters; control for exchange-rate regime; use only private-sector-employment-share countries.

Data

VariableSourceTransform
gdp_growth_volatility
outcome
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
rolling_sd_10yr
crisis_frequency
outcome
constructed:laeven_valencia_crisis_dummy_sum_10yrtier 5
level
output_loss_post_boom
outcome
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
peak_to_trough_gdp_loss
state_allocation_government_consumption_proxy
treatment
world_bank_wdi:NE.CON.GOVT.ZStier 2
level
state_allocation_intensity_index
treatment
constructed:0.4×world_bank_wdi:SE.PRV.TOTL.FE.ZS_inverse + 0.3×directed_credit_gdp + 0.3×public_investment_above_trendtier 5
level
state_enterprise_output_share
treatment
constructed:fraser_efw:government_enterprises + national_sourcestier 5
level
directed_credit_share_gdp
treatment
constructed:imf_wed:development_bank_credit + national_central_bank_datatier 5
level
log_initial_gdp_pc
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
natural_resource_rents
control
world_bank_wdi:NY.GDP.TOTL.RT.ZStier 2
level
financial_development
control
world_bank_wdi:FS.AST.PRVT.GD.ZStier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
institutional_quality_index
control
wgi:rqtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — frontier_income_volatility_state_allocation

Verdict: REFUTED — coef=-0.496 (sign opposite claim +), p=0.000422

Pre-registration

  • Claim: Across middle-income and catch-up economies 1980-2020, high state-directed allocation — measured by state-enterprise share of output, directed-credit intensity, and public-investment-driven growth — is associated with larger boom-bust cycles after middle-income status is reached, even when early catch-up growth is strong. The pre-registered claim is that countries in the top tercile of state-allocation intensity show at least 1.5 percentage points higher standard deviation of GDP growth and at least twice the crisis frequency in the post-middle-income window than bottom-tercile peers, after controlling for resource dependence, financial development, and initial income.
  • Falsification rule: Not supported if (a) the coefficient on state-allocation intensity is not positive and significant at p<0.05 on growth volatility, OR (b) the top-tercile vs bottom-tercile crisis-frequency ratio is below 1.3, OR (c) state-allocation intensity is negatively associated with volatility (suggesting state direction stabilises growth). A "developmentalist stabilisation" reading wins if (c) holds.
  • Falsification test: panel_fe_state_allocation_on_growth_volatility_and_crisis_frequency

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.496
  • Std error: 0.1401
  • p-value: 0.000422
  • Observations: 938, countries: 53
  • Within R²: 0.215
  • Fixed effects: entity=True, time=False
  • Clustering: country

Variables resolved

  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → gdp_growth_volatility (outcome, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → output_loss_post_boom (outcome, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:NE.CON.GOVT.ZS → state_allocation_government_consumption_proxy (treatment, publisher=world_bank_wdi, n=9133)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_initial_gdp_pc (controls, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NY.GDP.TOTL.RT.ZS → natural_resource_rents (controls, publisher=world_bank_wdi, n=11504)
  • world_bank_wdi:FS.AST.PRVT.GD.ZS → financial_development (controls, publisher=world_bank_wdi, n=9562)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • wgi:rq → institutional_quality_index (controls, publisher=wgi, n=5169)

Variables missing data

  • constructed: laeven_valencia_crisis_dummy_sum_10yr (outcome, name=crisis_frequency) — vintage not on disk
  • constructed: 0.4×world_bank_wdi:SE.PRV.TOTL.FE.ZS_inverse + 0.3×directed_credit_gdp + 0.3×public_investment_above_trend (treatment, name=state_allocation_intensity_index) — vintage not on disk
  • constructed: fraser_efw:government_enterprises + national_sources (treatment, name=state_enterprise_output_share) — vintage not on disk
  • constructed: imf_wed:development_bank_credit + national_central_bank_data (treatment, name=directed_credit_share_gdp) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:49+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

State-enterprise employment share from WDI is patchy for non-OECD countries. Directed-credit data rely on IMF WEO and national central-bank sources with inconsistent coverage. The composite index will have substantial missing data; this is flagged as the primary measurement limitation.

Authored framework. Read the transparency note.