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Institutions and long-run growth performance: An analytic literature review of the institutional determinants of economic growth

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  • Bluhm, Richard

    (UNU-MERIT / MGSOG, Maastricht University)

  • Szirmai, Adam

    (UNU-MERIT / MGSOG, Maastricht University)

Abstract

This paper provides an analytic review of selected contributions to the study of institutions and economic growth. We review the contributions to the study of institutional determinants of long-run growth by Engerman and Sokoloff, and Acemoglu, Johnson and Robinson. We discuss the work of Rodrik and others who focus on institutions and institutional reform and take steps towards bridging the gap between the study of long-run and short-run growth performances. In addition, we review two new theoretical frameworks by North, Wallis and Weingast and Khan that relate the structure of institutions to short-run volatility and long-run growth trends. We survey a wide array of supplementary econometric evidence and criticisms relating to each of these key contributions. Special attention is given to identifying the underlying causal relationships, the empirical methods and the kind of data used to test theories and hypotheses found in the literature. Further, we compare the findings in different strands of the literature using a sources-of-growth framework which distinguishes between ultimate, intermediate and proximate causes of growth and development.

Suggested Citation

  • Bluhm, Richard & Szirmai, Adam, 2012. "Institutions and long-run growth performance: An analytic literature review of the institutional determinants of economic growth," MERIT Working Papers 2012-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2012033
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    2. Vassilis T. Rapanos & Georgia Kaplanoglou, 2014. "Governance, Growth and the Recent Economic Crisis: The Case of Greece and Cyprus," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 8(1), pages 3-34, June.
    3. Szirmai, Adam, 2013. "Institutions and economic growth: Summary and synthesis," MERIT Working Papers 2013-070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. John Foster, 2015. "Energy, Knowledge and Economic Growth," Economic Complexity and Evolution, in: Andreas Pyka & John Foster (ed.), The Evolution of Economic and Innovation Systems, edition 127, pages 9-39, Springer.
    5. Kalkschmied, Katja, 2022. "Rebundling Institutions," VfS Annual Conference 2022 (Basel): Big Data in Economics 264064, Verein für Socialpolitik / German Economic Association.
    6. Gassmann, Franziska & Mohnen, Pierre & Vinci, Vincenzo, 2016. "Institutional factors and people's preferences in social protection," MERIT Working Papers 2016-003, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Katja Kalkschmied, 2020. "Rebundling Institutions," Graz Economics Papers 2020-03, University of Graz, Department of Economics.
    8. Bluhm, Richard & Crombrugghe, Denis de & Szirmai, Adam, 2012. "Explaining the dynamics of stagnation: An empirical examination of the North, Wallis and Weingast approach," MERIT Working Papers 2012-040, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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    More about this item

    Keywords

    growth; institutions; inequality; development;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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