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Political versus economic institutions in the growth process

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  • Flachaire, Emmanuel
  • García-Peñalosa, Cecilia
  • Konte, Maty

Abstract

After a decade of research on the relationship between institutions and growth, there is no consensus about the exact way in which these two variables interact. In this paper we re-examine the role that institutions play in the growth process using data for developed and developing economies over the period 1975–2005. Our results indicate that the data is best described by an econometric model with two growth regimes. Political institutions are the key determinant of which regime an economy belongs to, while economic institutions have a direct impact on growth rates within each regime. These findings support the hypothesis that political institutions are one of the deep causes of growth, setting the stage in which economic institutions and standard covariates operate.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 42 (2014)
Issue (Month): 1 ()
Pages: 212-229

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Handle: RePEc:eee:jcecon:v:42:y:2014:i:1:p:212-229

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: Growth; Institutions; Mixture regressions;

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Citations

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Cited by:
  1. Bertrand Venard, 2013. "Institutions, Corruption and Sustainable Development," Post-Print, HAL hal-00874275, HAL.
  2. Blau, Benjamin M. & Brough, Tyler J. & Thomas, Diana W., 2014. "Economic freedom and the stability of stock prices: A cross-country analysis," Journal of International Money and Finance, Elsevier, Elsevier, vol. 41(C), pages 182-196.
  3. Bertrand Venard, 2013. "Institutions, Corruption and Sustainable Development," Economics Bulletin, AccessEcon, vol. 33(4), pages 2545-2562.
  4. Maty Konte, 2012. "A Curse or a Blessing? Natural Resources in a Multiple Growth Regimes Analysis," AMSE Working Papers, Aix-Marseille School of Economics, Marseille, France 1218, Aix-Marseille School of Economics, Marseille, France.

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