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Social and institutional factors of economic development: evidence from Europe

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  • Helje Kaldaru

    ()
    (Faculty of Economics and Business Administration, University of Tartu)

  • Eve Parts

    ()
    (Faculty of Economics and Business Administration, University of Tartu)

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    Abstract

    Social and institutional determinants of economic development are attracting increasing attention among development economists. The present paper analyses the impact of macro-level social capital and related social factors on economic development in 34 European countries. Macro-level social capital comprises different aspects of institutional quality and is closely related to income distribution and social cohesion. We used principal component analysis to group initially selected social determinants of economic development into three components (human and social capital, income equality, and redistribution), which altogether describe 64.4% of the variation in initial variables. The following regression analysis proved that all these components have a positive effect on economic development, measured by the human development index.

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    Bibliographic Info

    Article provided by Baltic International Centre for Economic Policy Studies in its journal Baltic Journal of Economics.

    Volume (Year): 8 (2008)
    Issue (Month): 1 (October)
    Pages: 29-51

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    Handle: RePEc:bic:journl:v:8:y:2008:i:1:p:29-51

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    Keywords: Social capital; institutional quality; economic development; European economies;

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