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Political Institutions and Growth Collapses

  • Gavira, Alejandro

    ()

    (National Department of Planning, Colombia)

  • Panizza, Ugo

    ()

    (Research Department of the Inter-American Development Bank)

  • Seddon, Jessica

    ()

    (Political Economist program)

  • Stein, Ernesto

    ()

    (Research Department of the Inter-American Development Bank)

This paper tests whether Rodrik's (1999) results that institutions for conflict management are associated with the ability to react to economic shocks are robust to different ways of defining the quality of such institutions. In this paper, we measure the quality of conflict management institutions with two different indices. The first is an index of political constraints on the ability of the executive to impose its will. These constraints limit the ability of the government to arbitrarily change the rules of the game and therefore may reduce redistributive struggles. The second index measures the degree of political particularism. We define political particularism as the policymakers’ ability to further their career by catering to narrow interests rather than broader national platforms, The indices used in this paper solve the endogeneity and subjectivity biases that affect Rodrik's main measure of institutional quality We find strong support for the idea that high levels of political constraints and intermediate levels of political particularism are associated with a quick recovery from economic shocks.

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Article provided by Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana in its journal Revista Latinoamericana de Desarrollo Economico.

Volume (Year): (2004)
Issue (Month): 2 (Abril)
Pages: 11-32

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Handle: RePEc:ris:revlde:0201
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