A new way to link development to institutions,policies and geography
AbstractThe paper aims to examine the role of institutions relative to economic policy and geography in explaining the differential level of development across countries over time. To that end, it attempts to construct a Development Quality Index (DQI) and an Institutional Quality Index (IQI) by using multivariate statistical method of principal components. It shows that (i) higher level of IQI along with economic policy and geography factors lead to a positive improvement in the level of DQI; and (ii) results remain robust for IQI and relatively robust for economic policy and geography even when it is compared across cross-section and panel data estimation for a set of 102 countries over 1980 to 2004. The results strongly indicate that institutions matter in the context of specific economic policy mixes and geography related factors illustrated by disease burden, etc. It demonstrates that relative influence of institutions varies across stages of development.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 04-2008.
Date of creation: 01 Mar 2008
Date of revision: Mar 2008
Development; Institutions; Economic policy; Geography; Principal component; Instrumental variables; Panel data;
Other versions of this item:
- Sudip Ranjan Basu, 2008. "A New Way To Link Development To Institutions, Policies And Geography," UNCTAD Blue Series Papers 37, United Nations Conference on Trade and Development.
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
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.:
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- J. Stiglitz, 1999. "Whither Reform? Ten Years of the Transition," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.
- Douglas Staiger & James H. Stock, 1994.
"Instrumental Variables Regression with Weak Instruments,"
NBER Technical Working Papers
0151, National Bureau of Economic Research, Inc.
- Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
- Pranab Bardhan, 2005. "Institutions matter, but which ones?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 499-532, 07.
- Wacziarg, Romain & Welch, Karen Horn, 2003.
"Trade Liberalization and Growth: New Evidence,"
1826, Stanford University, Graduate School of Business.
- Hausman, Jerry A, 1978.
"Specification Tests in Econometrics,"
Econometric Society, vol. 46(6), pages 1251-71, November.
- Blundell, R. & Bond, S., 1995.
"Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,"
104, Economics Group, Nuffield College, University of Oxford.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2005. "Governance matters IV : governance indicators for 1996-2004," Policy Research Working Paper Series 3630, The World Bank.
- John Shea, 1996.
"Instrument Relevance in Multivariate Linear Models: A Simple Measure,"
NBER Technical Working Papers
0193, National Bureau of Economic Research, Inc.
- John Shea, 1997. "Instrument Relevance in Multivariate Linear Models: A Simple Measure," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 348-352, May.
- Margaret S. McMillan & William A. Masters, 2000.
"Climate and scale in economic growth,"
CSAE Working Paper Series
2000-13, Centre for the Study of African Economies, University of Oxford.
- William A. Masters & Margaret S. McMillan, 2000. "Climate and Scale In Economic Growth," CID Working Papers 48, Center for International Development at Harvard University.
- Masters, William A. & McMillan, Margaret S., 2001. "Climate And Scale In Economic Growth," Miscellaneous Papers 11845, Agecon Search.
- William A Masters and Margaret S McMillan, 2000. "Climate and Scale in Economic Growth," Economics Series Working Papers WPS/2000-13, University of Oxford, Department of Economics.
- Olsson, Ola & Hibbs Jr., Douglas A., 2000.
"Biogeography and Long-Run Economic Development,"
Working Papers in Economics
26, University of Gothenburg, Department of Economics, revised 11 Aug 2000.
- Easterly, William & Levine, Ross, 2003.
"Tropics, germs, and crops: how endowments influence economic development,"
Journal of Monetary Economics,
Elsevier, vol. 50(1), pages 3-39, January.
- William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," NBER Working Papers 9106, National Bureau of Economic Research, Inc.
- William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," Working Papers 15, Center for Global Development.
- John W. McArthur & Jeffrey D. Sachs, 2001. "Institutions and Geography: Comment on Acemoglu, Johnson and Robinson (2000)," NBER Working Papers 8114, National Bureau of Economic Research, Inc.
- Dasgupta, Partha & Weale, Martin, 1992. "On measuring the quality of life," World Development, Elsevier, vol. 20(1), pages 119-131, January.
- Resnick, Danielle & Birner, Regina, 2006. "Does good governance contribute to pro-poor growth?: a review of the evidence from cross-country studies," DSGD discussion papers 30, International Food Policy Research Institute (IFPRI).
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Sudhir Anand and Amartya Sen, 1994. "Human development Index: Methodology and Measurement," Human Development Occasional Papers (1992-2007) HDOCPA-1994-02, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- Sebastian Edwards, 1997.
"Openness, Productivity and Growth: What Do We Really Know?,"
NBER Working Papers
5978, National Bureau of Economic Research, Inc.
- Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-98, March.
- Jagdish N. Bhagwati, 2004. "In Defense of Globalization: It Has a Human Face," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 9-20, November-.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output per Worker than Others?,"
NBER Working Papers
6564, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
- L Alan Winters, 2004. "Trade Liberalisation and Economic Performance: An Overview," Economic Journal, Royal Economic Society, vol. 114(493), pages F4-F21, 02.
- S. Terzi & A. Trezzini & L. Moroni, 2014.
"A PLS path model to investigate the relations between institutions and human development,"
Quality & Quantity: International Journal of Methodology,
Springer, vol. 48(3), pages 1271-1290, May.
- Silvia Terzi & Attilio Trezzini & Luca Moroni, 2012. "A Pls Path Model To Investigate The Relations Between Institutions And Human Development," Departmental Working Papers of Economics - University 'Roma Tre' 0145, Department of Economics - University Roma Tre.
- Bhupatiraju, Samyukta & Verspagen, Bart, 2013. "Economic development, growth, institutions and geography," MERIT Working Papers 056, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Efendic, Adnan & Pugh, Geoff & Adnett, Nick, 2011. "Institutions and economic performance: A meta-regression analysis," European Journal of Political Economy, Elsevier, vol. 27(3), pages 586-599, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Johannes Eugster).
If references are entirely missing, you can add them using this form.