GOVERNMENT PARTISANSHIP, LABOR ORGANIZATION, AND MACROECONOMIC PERFORMANCE - A CORRIGENDUM

Alvarez, Garrett and Lange (1991) used cross-national panel data on th e Organization for Economic Coordination and Development nations to sh ow that countries with left governments and encompassing labor movemen ts enjoyed superior economic performance. Here we show that the standa rd errors reported in that article are incorrect. Reestimation of the model using ordinary least squares and robust standard errors upholds the major finding of Alvarez, Garrett and Lange, regarding the politic al and institutional causes of economic growth but leaves the findings for unemployment and inflation open to question. We show that the mod el used by Alvarez, Garrett and Lange, feasible generalized least squa res, cannot produce standard errors when the number of countries analy zed exceeds the length of the time period under analysis. Also, we arg ue that ordinary least squares with robust standard errors is superior to feasible generalized least squares for typical cross-national pane l studies.