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Unbundled Institutions, Human Capital and Growth

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Author Info
Sambit Bhattacharyya

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Abstract

We investigate the partial effects of institutions and human capital on growth. We find that cross-country regressions of the log-level of per capita GDP on instrumented measures of institutions and schooling are uninformative about the relative importance of institutions and human capital in the long run because of multicollinearity problems. Using dynamic panel regressions we show that both institutions and human capital have significant effects on growth. Using Rodrik's (2005) four-way partition of institutions, we also unbundle institutions. We show that strong market creating institutions and market stabilising institutions are growth enhancing. Market regulating institutions matter up to a certain extent and market legitimising institutions does not seem to matter.

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Paper provided by Australian National University, Economics RSPAS in its series Departmental Working Papers with number 2008-14.

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Length: 38 pages
Date of creation: 2008
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Handle: RePEc:pas:papers:2008-14

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Related research
Keywords: Institutions; Human Capital; Growth;

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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  2. Dani Rodrik, 2000. "Institutions for High-Quality Growth: What They are and How to Acquire Them," NBER Working Papers 7540, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Alex William Trew, 2009. " Contracting Institutions and Growth," CDMA Working Paper Series 0904, Centre for Dynamic Macroeconomic Analysis. [Downloadable!]
  2. Alex William Trew, 2009. " Institutions and the Scale Effect," CDMA Working Paper Series 0906, Centre for Dynamic Macroeconomic Analysis. [Downloadable!]
  3. Sambit Bhattacharyya, 2008. "Trade Liberalization And Institutional Development," Departmental Working Papers 2008-13, Australian National University, Economics RSPAS. [Downloadable!]
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