4th century BCE: knowledge is a source of economic growth
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[German title: 4. Jahrhundert v. Chr.: Wissen ist eine Quelle für wirtschaftliches Wachstum]

Title: Kautilya on institutions, governance, knowledge, ethics and prosperity 
Author(s): Balbir S. Sihag 
Journal: Humanomics 
ISSN: 0828-8666 
Year: 2007 Volume: 23 Issue: 1 Page: 5 – 28 
DOI: 10.1108/08288660710725109 
Publisher: Emerald Group Publishing Limited 

Abstract: Purpose – Both researchers and policy makers have increasingly focused their energies in exploring the sources of economic growth. The purpose of this paper is to explore the very first ideas on the sources of economic growth of Kautilya during the fourth century BCE.
Design/methodology/approach – Kautilya’s non-technical statements on economic growth are presented as a formal model of economic growth.
Findings – Kautilya believed that institutions are a prerequisite to economic growth and good governance, knowledge, ethical conduct and economic growth are interdependent. That is, Kautilya believed in the virtuous cycle of economic growth.
Research limitations/implications – Kautilya’s model of virtuous cycle implies that Kaufmann and Kraay specify an incorrect model to test the virtuous cycle model of economic growth.
Practical implications – Although it is a challenge to empirically estimate Kautilya’s model if estimated appropriately, it could help in partitioning the Solow residuals into contributions made by technical progress and good governance towards economic growth.
Originality/value – The paper amounts to rewriting the history of economic thought. 

Keywords: Economic growth, Ethics, Governance, Knowledge management, Organizational theory 

Article Type: Research paper 

Article URL: http://www.emeraldinsight.com/10.1108/08288660710725109

© Emerald Group Publishing Limited


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