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Economic development as a matter of political geography

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Author Info
Jorge M.Streb
Pablo F.Druck ()

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Abstract

Can limited government be a driving force of economic development? This idea goes back to Montesquieu, and is closely related to recent research in institutional economics. Measuring limited government with the Henisz political constraints index, and economic development with income per capita, the paper first does a causality test to see whether political constraints lead income per capita. Since both are persistent variables, their differences are analyzed. The evidence from the 1960-1990 period indeed suggests that increases in political constraints precede economic growth. The effect of political constraints might take a long time period to set in, so a second test looks at the link between income per capita and polity persistence, conditioned on the degree of political constraints. Polity persistence is positively linked to income per capita with high political constraints, but there is no link with low political constraints. This broader evidence suggests that limited government has been condu

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File URL: http://econ.uchile.cl/public/Archivos/pub/16fd5bb8-2d6b-4838-bd1f-a6c123db5e23.pdf
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Publisher Info
Article provided by University of Chile, Department of Economics in its journal Estudios de Economia.

Volume (Year): 34 (2007)
Issue (Month): 1 Year 2007 (June)
Pages: 5-20
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Handle: RePEc:udc:esteco:v:34:y:2007:i:1:p:5-20

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Related research
Keywords: Limited government; political constraints; polity persistence; economic development; income per capita.;

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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    Other versions:
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    Other versions:
  8. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August. [Downloadable!] (restricted)
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  14. Jorge M.Streb, 2001. "Political uncertainty and economic underdevelopment," Estudios de Economia, University of Chile, Department of Economics, vol. 28(1 Year 20), pages 89-114, June. [Downloadable!]
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  1. Jorge M.Streb, 2001. "Political uncertainty and economic underdevelopment," Estudios de Economia, University of Chile, Department of Economics, vol. 28(1 Year 20), pages 89-114, June. [Downloadable!]
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