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Social and institutional factors of economic development: evidence from Europe

Author

Listed:
  • Helje Kaldaru

    () (Faculty of Economics and Business Administration, University of Tartu)

  • Eve Parts

    () (Faculty of Economics and Business Administration, University of Tartu)

Abstract

Social and institutional determinants of economic development are attracting increasing attention among development economists. The present paper analyses the impact of macro-level social capital and related social factors on economic development in 34 European countries. Macro-level social capital comprises different aspects of institutional quality and is closely related to income distribution and social cohesion. We used principal component analysis to group initially selected social determinants of economic development into three components (human and social capital, income equality, and redistribution), which altogether describe 64.4% of the variation in initial variables. The following regression analysis proved that all these components have a positive effect on economic development, measured by the human development index.

Suggested Citation

  • Helje Kaldaru & Eve Parts, 2008. "Social and institutional factors of economic development: evidence from Europe," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 8(1), pages 29-51, October.
  • Handle: RePEc:bic:journl:v:8:y:2008:i:1:p:29-51
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    References listed on IDEAS

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    Cited by:

    1. Maack, Maria & Davidsdottir, Brynhildur, 2015. "Five capital impact assessment: Appraisal framework based on theory of sustainable well-being," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1338-1351.

    More about this item

    Keywords

    Social capital; institutional quality; economic development; European economies;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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