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Institutional interactions and economic growth: the joint effects of property rights, veto players and democratic capital

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  • Mogens Justesen

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  • Peter Kurrild-Klitgaard

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Abstract

We investigate the possible interaction effects that the extent of property rights protection and separation of powers in a political system have on economic growth. Using analysis of panel data from more than countries over the period 1970-2010 we find that the growth effects of property rights increase when political power is divided among more veto players. When distinguishing between institutional veto players (political institutions) and partisan veto players (fractionalization among political parties), we further find that the growth effects of property rights are driven mainly by checks on the chief executive (in bicameral systems) and primarily found in countries with large stocks of democratic capital.
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  • Mogens Justesen & Peter Kurrild-Klitgaard, 2013. "Institutional interactions and economic growth: the joint effects of property rights, veto players and democratic capital," Public Choice, Springer, vol. 157(3), pages 449-474, December.
  • Handle: RePEc:kap:pubcho:v:157:y:2013:i:3:p:449-474
    DOI: 10.1007/s11127-013-0143-1
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    Citations

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    Cited by:

    1. Christian Bjørnskov, 2015. "Constitutional property rights protection and economic growth: evidence from the post-communist transition," Constitutional Political Economy, Springer, vol. 26(3), pages 247-280, September.
    2. Tenryu, Yohei, 2013. "The Role of the Private Sector under Insecure Property Rights," MPRA Paper 74893, University Library of Munich, Germany, revised 27 Oct 2016.
    3. repec:ejw:journl:v:12:y:2015:i:3:p:400-431 is not listed on IDEAS
    4. Sen, Kunal & Pritchett, Lant & Kar, Sabyasachi & Raihan, Selim, 2016. "Democracy Versus Dictatorship? The Political Determinants of Growth Episodes," Working Paper Series rwp17-009, Harvard University, John F. Kennedy School of Government.
    5. repec:spr:inrvec:v:64:y:2017:i:3:d:10.1007_s12232-017-0271-x is not listed on IDEAS
    6. Daniel L. Bennett & Hugo J. Faria & James D. Gwartney & Daniel R. Morales, 2016. "Evaluating Alternative Measures of Institutional Protection of Private Property and Their Relative Ability to Predict Economic Development," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Summer 20), pages 57-78.
    7. repec:bla:coecpo:v:35:y:2017:i:3:p:518-531 is not listed on IDEAS

    More about this item

    Keywords

    Economic growth; Institutions; Property rights; Veto players; Democracy;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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