psi vs ECI: Cognitive-Institutional Capacity and Export Complexity as Predictors of Long-Run Growth
Year: 2025
Type: article
Abstract: This record contains the article "psi vs ECI: Cognitive-Institutional Capacity and Export Complexity as Predictors of Long-Run Growth" (version 1.2, November 2025) and the associated replication materials. The paper compares the predictive power of a broad cognitive-institutional index ψ and the canonical Economic Complexity Index (ECI) for long-run GDP per capita growth over 2000–2024. We construct a global panel that combines indicators of human capital, governance, digitalization, innovation, and export complexity, and then build a 10-year growth panel with simple, transparent regression models. Four main findings emerge: 1. A residualized version of ψ, orthogonalized with respect to initial log GDP per capita (denoted ψₙg), is a stable positive predictor of subsequent 10-year GDP per capita growth, explaining about 2–4% of the variance in simple OLS specifications.2. ECI on its own shows a weak negative association with long-run growth, but becomes a positive and significant predictor in a two-way fixed-effects specification (country and initial-year effects), where both ψₙg and ECI are jointly important.3. An interaction model g ~ ψ + ECI + ψ × ECI reveals a positive and significant complementarity term, consistent with the idea that export complexity is most growth-enhancing once cognitive-institutional capacity is sufficiently high.4. A simple out-of-sample experiment (train ≤ 2010, test > 2010) yields a negative out-of-sample R², underscoring the limits of purely statistical forecasting on a shock-prone 21st-century panel. Overall, export complexity appears as a conditional engine of growth: it matters most once a country has accumulated sufficient cognitive-institutional capacity, as captured by ψ and its income-orthogonalized version ψₙg. --- Code, data, and replication The active development repository is available on GitHub: - GitHub (psi vs ECI branch): https://github.com/Evoluit-M/Evoluism-S/tree/psi-vs-eci-v1.2 The record includes:- PDF of the article.- Optional replication archive (`psi_vs_eci_replication_v1_2.zip`) with processed data, scripts, and figures. A fully reproducible Python environment is available via MyBinder: - MyBinder JupyterLab: https://mybinder.org/v2/gh/Evoluit-M/Evoluism-S/psi-vs-eci-v1.2?urlpath=lab --- Interactive web tools (not required for replication) Two interactive Streamlit dashboards allow users to explore ψ, ψₙg, and ECI: - Global Explorer (dynamic scatter plots and marginal effects): https://evoluism-s-8l6ofe9zevyfx3ava6chfg.streamlit.app/ - Country Diagnostic Tool (country-level comparison to the global cloud): https://evoluism-s-dprxvrom8ujrujtygnfgvf.streamlit.app/
Author: Evoluit, M.
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7108724707
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