2004). For instance, although extremely bad policy can probably destroy any chance of growth, it does not follow that good macroeconomic or trade policy alone can create the conditions for high steady-state growth. Second, research into the effects of economic policies on growth usually focus on the years following 1960, for which national accounts data started to become available for a large group of countries<sup>8</sup> . However, given that the correlation of per capita income in 1960 with per capita income in 1999 is 0.87 (Easterly, 2004), countries’ relative performance may largely be explained by the point they had already reached by 1960, suggesting that the role of post-1960 policies in determining development outcomes can only be limited. The role of policies in explaining post-1960 growth is further constrained once we realize that policy variables are much more stable over time than are growth rates (Easterly, Kremer and Pritchett, 1993). Third, research devoted to economic growth does not always take into account the role of externalities, which would otherwise explain why many countries appear to share a common long run growth rate despite persistently different rates of investment in physical and human capital (Klenow and Rodriguez-Clare, 2004). Finally, growth regressions require large samples to address issues such as the identification of empirically salient determinants of growth when the range of potential factors is large relative to the number of observations (Durlauf, 2004), and the requirements of panel data methods to detect growth patterns in a dataset comprised of heterogeneous countries (Islam, 1995; Durlauf, 2004). Similarly, some methods for addressing other problems, such as measurement error, are only useful in samples larger than those that are usually available to growth researchers. It follows that conclusions derived from empirical growth research based on small samples would rightly be regarded as questionable.

Despite the many difficulties that arise in empirical growth research, researchers have uncovered stylized facts – such as the massive divergence in living standards that has occurred over the last several centuries, the lack of sustained productivity growth in the poorer regions of the world, the unprecedented growth rates in some developing countries after the 1960s – and linked them to substantive economic arguments. This paper attempts to contribute in a small way to the understanding of the contribution of one set of factors, namely infrastructure stocks, to economic growth, in one region of the world, namely East Asia. It should be stated at the outset that the dataset constructed for the analysis is small given the relatively low number of countries and the

> constructing a sound institutional underpinning to maintain productive dynamism and endow the economy with resilience to shocks over the longer term. Ignoring the distinction between these two tasks leaves reformers saddled with impossibly ambitious, undifferentiated, and impractical policy agendas (Rodrik, 2004).

> 8 Another reason for this starting point is that many colonies did not gain independence until the 1960s (Durlauf, 2004; Easterly, 2004).

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