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Island Status, Country Size and Institutional Quality in Former Colonies

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  • Congdon Fors, Heather

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

The purpose of this paper is to explore the effects of island status and country size on institutional quality, and to determine if these institutional effects can explain the relatively strong economic performance of islands and small countries. One of the main findings of this paper is that the relationship between island status and institutional quality is significantly positive, and that these results are robust to the inclusion of a number of control variables. Further, we find that country size is negatively related to institutional quality, which is in keeping with previous results. Finally, using an instrumental variable method we demonstrate that when Rule of Law is included in regressions on levels of per capita GDP, the positive effects of small country size and island status disappear. These results provide further support for our hypothesis that institutions account for these countries’ relatively better economic performance.

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File URL: http://hdl.handle.net/2077/4589
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 257.

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Length: 42 pages
Date of creation: 19 Jun 2007
Date of revision:
Handle: RePEc:hhs:gunwpe:0257

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: islands; political institutions; economic institutions; rule of law; development;

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Cited by:
  1. Olsson, Ola, 2007. "On the Institutional Legacy of Mercantilist and Imperialist Colonialism," Working Papers in Economics, University of Gothenburg, Department of Economics 247, University of Gothenburg, Department of Economics.

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