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Obedience and income levels

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  • Kaitlyn Harger
  • Joshua C. Hall

Abstract

We revisit the relationship between informal institutions and income levels. The empirical literature on institutions finds that indices of 'informal institutions' such as trust, respect, respect, self-determination and obedience are more important than 'formal institutions' such as constitutional constraints in explaining income levels across countries. We add to this literature in two ways. First, we separate out the index of informal institutions into its component parts to see which informal institutions are primary. Second, we construct two new measures of obedience to test the robustness of obedience. Our reduced-form results indicate the primacy of obedience over other informal institutions.

Suggested Citation

  • Kaitlyn Harger & Joshua C. Hall, 2015. "Obedience and income levels," Applied Economics Letters, Taylor & Francis Journals, vol. 22(2), pages 94-98, January.
  • Handle: RePEc:taf:apeclt:v:22:y:2015:i:2:p:94-98
    DOI: 10.1080/13504851.2014.927563
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    References listed on IDEAS

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    1. Rafael La Porta & Florencio Lopez-de-Silanes & Cristian Pop-Eleches & Andrei Shleifer, 2004. "Judicial Checks and Balances," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 445-470, April.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    3. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 677-716, June.
    4. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1231-1294.
    5. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    6. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    7. Claudia Williamson, 2009. "Informal institutions rule: institutional arrangements and economic performance," Public Choice, Springer, vol. 139(3), pages 371-387, June.
    8. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x.
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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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