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A Pls Path Model To Investigate The Relations Between Institutions And Human Development

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  • Silvia Terzi
  • Attilio Trezzini
  • Luca Moroni

    ()

Abstract

The paper studies the relations between types of institutions on different components of human development. A role of aggregate demand in determining the material components of human development is assumed. We thus divide institutions into those that create demand and those that are determined by the whole process of development. Similarly we divide human development in its three traditional components (economic development, health, knowledge). Both human development and institutions are assumed as multidimensional constructs; all the main components of these constructs are defined as latent variables, and the relations between them as structural relations. A Partial Least Squares (PLS) path model is developed: it is the aggregation (and simultaneous estimation) of an outer model relating observed or manifest variables to their own latent variable and of a structural model (inner model) relating some endogenous latent variable to other latent variables. From the goodness of fit point of view, our results seem to validate our theoretical assumptions.

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Bibliographic Info

Paper provided by Department of Economics - University Roma Tre in its series Departmental Working Papers of Economics - University 'Roma Tre' with number 0145.

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Length: 40
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:rtr:wpaper:0145

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Keywords: Structural Equations Models; Institutions; Human Development;

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  1. 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).
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  7. Djankov, Simeon & Glaeser, Edward L & López-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The New Comparative Economics," CEPR Discussion Papers 3882, C.E.P.R. Discussion Papers.
  8. Sudip Ranjan Basu, 2008. "A new way to link development to institutions,policies and geography," IHEID Working Papers 04-2008, Economics Section, The Graduate Institute of International Studies, revised Mar 2008.
  9. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, 09.
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  11. Tenenhaus, Michel & Vinzi, Vincenzo Esposito & Chatelin, Yves-Marie & Lauro, Carlo, 2005. "PLS path modeling," Computational Statistics & Data Analysis, Elsevier, vol. 48(1), pages 159-205, January.
  12. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
  13. William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," NBER Working Papers 9106, National Bureau of Economic Research, Inc.
  14. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  15. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
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