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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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number
257.
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, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden Phone: 031-773 10 00 Web page: http://www.handels.gu.se/econ/ More information through EDIRC
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Find related papers by JEL classification: N40 - Economic History - - Government, War, Law, and Regulation - - - General, International, or Comparative O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
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