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Institutions and Poverty

Author

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  • Edinaldo Tebaldi
  • Ramesh Mohan

Abstract

This study utilises eight alternative measures of institutions and the instrumental variable method to examine the impacts of institutions on poverty. The estimates show that an economy with a robust system to control corruption, an effective government, and a stable political system will create the conditions to promote economic growth, minimise income distribution conflicts, and reduce poverty. Corruption, ineffective governments, and political instability will not only hurt income levels through market inefficiencies, but also escalate poverty incidence via increased income inequality. The results also imply that the quality of the regulatory system, rule of law, voice and accountability, and expropriation risk are inversely related to poverty but their effect on poverty is via average income rather than income distribution.

Suggested Citation

  • Edinaldo Tebaldi & Ramesh Mohan, 2010. "Institutions and Poverty," Journal of Development Studies, Taylor & Francis Journals, vol. 46(6), pages 1047-1066.
  • Handle: RePEc:taf:jdevst:v:46:y:2010:i:6:p:1047-1066
    DOI: 10.1080/00220380903012730
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    References listed on IDEAS

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    1. Tebaldi, Edinaldo & Mohan, Ramesh, 2008. "Institutions-Augmented Solow Model And Club Convergence," MPRA Paper 10386, University Library of Munich, Germany.
    2. Alice Sindzingre, 2005. "Explaining Threshold Effects of Globalization on Poverty: an Institutional Perspective," WIDER Working Paper Series RP2005-53, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Alessandra Cepparulo & Juan Carlos Cuestas & Maurizio Intartaglia, 2017. "Financial development, institutions, and poverty alleviation: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 49(36), pages 3611-3622, August.
    2. Guerriero, Marta, 2019. "Democracy and the Labor Share of Income: A Cross-Country Analysis," ADBI Working Papers 919, Asian Development Bank Institute.
    3. Asongu, Simplice A & Odhiambo, Nicholas M, 2019. "Income levels,governance and inlusive human development in Sub-Saharan Africa," Working Papers 25589, University of South Africa, Department of Economics.
    4. Vianna, Andre C. & Mollick, Andre V., 2018. "Institutions: Key variable for economic development in Latin America," Journal of Economics and Business, Elsevier, vol. 96(C), pages 42-58.
    5. Edinaldo Tebaldi & Erik Alda, 2017. "Quality of Institutions and Violence Incidence: a Cross-Country Analysis," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 45(3), pages 365-384, September.
    6. Chi-Chuan Lee & Chien-Chiang Lee, 2018. "The Impact of Country Risk on Income Inequality: A Multilevel Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(1), pages 139-162, February.
    7. Simplice A. Asongu & Oasis Kodila-Tedika, 2018. "Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(1), pages 99-117, August.
    8. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
    9. Kodila-Tedika, Oasis & Tcheta-Bampa, Albert, 2014. "Cold War and Institutional Quality: Some Empirical Evidence," MPRA Paper 53965, University Library of Munich, Germany.
    10. Kodila-Tedika, Oasis & Ngunza Maniata, Kevin, 2018. "Financial Constraints and Poverty," MPRA Paper 84839, University Library of Munich, Germany.
    11. Michael Enowbi Batuo & Simplice A. Asongu, 2015. "The impact of liberalisation policies on income inequality in African countries," Journal of Economic Studies, Emerald Group Publishing, vol. 42(1), pages 68-100, January.
    12. Mohamed Dridi, 2014. "Corruption and Education: Empirical Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 4(3), pages 476-493.
    13. Asadullah, M. Niaz & Savoia, Antonio, 2018. "Poverty reduction during 1990–2013: Did millennium development goals adoption and state capacity matter?," World Development, Elsevier, vol. 105(C), pages 70-82.
    14. Dawson, Andrew, 2013. "The Social Determinants of the Rule of Law: A Comparison of Jamaica and Barbados," World Development, Elsevier, vol. 45(C), pages 314-324.
    15. Ana Paula Ribeiro & Sandra Tavares Silva & Duarte Guimarães, 2015. "Macroeconomic Fundamentals of Poverty and Deprivation: An Empirical Study for Developed Countries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 27(1), pages 37-66, January.
    16. Maurizio Intarglia & Juan Carlos Cuestas, 2014. "Do institutions alleviate poverty? An empirical analysis," NCID Working Papers 05/2014, Navarra Center for International Development, University of Navarra.
    17. Erkko Autio & Kun Fu, 2015. "Economic and political institutions and entry into formal and informal entrepreneurship," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 67-94, March.
    18. Asongu Simplice & Michael E. Batuo, 2012. "The Impact of Liberalisation Policies on Inequality in Africa," Working Papers of the African Governance and Development Institute. 12/038, African Governance and Development Institute..
    19. Aloui, Zouhaier, 2019. "Have economic growth and the quality of governance contributed to poverty reduction and improved well-being in African countries?," MPRA Paper 95139, University Library of Munich, Germany.
    20. Awaworyi Churchill, Sefa & Smyth, Russell, 2017. "Ethnic Diversity and Poverty," World Development, Elsevier, vol. 95(C), pages 285-302.
    21. Kodila-Tedika, Oasis & Mulunda Kabange, Martin, 2018. "Constitutional instability and Poverty: Some Empirical Evidence," MPRA Paper 84501, University Library of Munich, Germany.
    22. Tytti Pasanen & Hanna Lakkala & Riikka Yliluoma & Visa Tuominen & Sari Jusi & Jyrki Luukkanen & Jari Kaivo-oja, 2017. "Poverty–Environment Nexus in the Lao PDR: Analysis of Household Survey Data," Development Policy Review, Overseas Development Institute, vol. 35(3), pages 349-371, May.
    23. Juan Carlos Cuestas & Maurizio Intartaglia, 2016. "Do institutions alleviate poverty? New Empirical Evidence," Economics Bulletin, AccessEcon, vol. 36(1), pages 145-154.
    24. Antonio Savoia & Kunal Sen, 2015. "Measurement, Evolution, Determinants, And Consequences Of State Capacity: A Review Of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 441-458, July.

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