Institutions and economic performance: A meta-regression analysis

This paper applies meta-regression analysis to the empirical literature that investigates the effect of institutions on economic performance. Although studies with growth-theoretic foundations do not yield robust evidence for an authentic empirical effect, we find more robust evidence of positive and large institutional effects on output levels. The partial correlations between institutional and economic performance variables are also influenced by model specification choices and, in particular, (non)treatment of the potential endogeneity of institutions. A corollary of such pronounced heterogeneities is that we cannot report a representative estimated effect size, although the evidence overwhelmingly suggests a positive influence of institutional quality on economic outcomes.