Spatial Spillovers in the Development of Institutions
AbstractWe examine spatial spillovers between countries in the development of institutions. Our dependent variables are three measures of institutions that relate to politics, law, and governmental administration. The major explanatory variable on which we focus is a spatial lag of the dependent variable, that is, the level of similar institutions in bordering countries. We also consider long-term determinants of institutions that have been previously examined in the literature, such as legal origin, religious groupings, ethnolinguistic fractionalization, resource base, and initial level of GDP per capita. Our framework of analysis is a spatial panel data model. Because of missing observations, our panel data set is not balanced, which causes special problems in estimating spatial models. These problems are explicitly recognized in our estimation procedure, which implements new results in spatial econometrics. Spatial spill-over effects between countries are statistically significant and economically important. We provide evidence of the size of the general equilibrium effects of spatial spillovers by examining a counter-factual the non-existence of the Soviet Union. Our central conclusions are bolstered by robustness tests that involve alternative treatments of GDP per capita and the inclusion of fixed effects.
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Bibliographic InfoPaper provided by University of Maryland, Department of Economics in its series Electronic Working Papers with number 07-001.
Length: 38 pages
Date of creation: Nov 2007
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
Web page: http://www.econ.umd.edu/
Postal: Ms. Elizabeth Martinez, Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
Other versions of this item:
- Kelejian, Harry H. & Murrell, Peter & Shepotylo, Oleksandr, 2013. "Spatial spillovers in the development of institutions," Journal of Development Economics, Elsevier, vol. 101(C), pages 297-315.
- C5 - Mathematical and Quantitative Methods - - Econometric Modeling
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
- P5 - Economic Systems - - Comparative Economic Systems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-08 (All new papers)
- NEP-ECM-2008-03-08 (Econometrics)
- NEP-GEO-2008-03-08 (Economic Geography)
- NEP-TRA-2008-03-08 (Transition Economics)
- NEP-URE-2008-03-08 (Urban & Real Estate Economics)
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- Ahmad, Mahyudin & Hall, Stephen G., 2012. "Institutions-growth spatial dependence: An empirical test," MPRA Paper 42360, University Library of Munich, Germany.
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