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Do We See Convergence in Institutions? A Cross-Country Analysis

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  • Antonio Savoia
  • Kunal Sen

Abstract

Differences in the quality of institutions may explain differences in per capita income. Yet, we know relatively little on how institutions evolve. This paper contributes to such knowledge by testing for convergence in legal, bureaucratic and administrative institutional quality. Using cross-section and panel methods on a large sample of countries from the 1970s to 2010, we find that countries with initially poor institutions tended to slowly catch up, both when they shared the same initial conditions and when they did not. However, the convergence process seems to be a temporary effect following the end of the Cold War.

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  • Antonio Savoia & Kunal Sen, 2016. "Do We See Convergence in Institutions? A Cross-Country Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 52(2), pages 166-185, February.
    • Handle: RePEc:taf:jdevst:v:52:y:2016:i:2:p:166-185
    DOI: 10.1080/00220388.2015.1060315
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    Cited by:

    1. Usman Khalid & Luke Okafor & Muhammad Shahbaz, 2022. "Economic reform and political stagnation: The inconsistent patterns of institutional change," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(4), pages 813-844, October.
    2. Valentina Vučković & Ružica Šimić Banović & Martina Basarac Sertić, 2021. "Governance Trends among New EU Member States: Is There Institutional Convergence?," Sustainability, MDPI, vol. 13(24), pages 1-15, December.
    3. James E. Payne & James W. Saunoris & Saban Nazlioglu & Cagin Karul, 2023. "Stochastic convergence analysis of US state economic freedom sub‐components: Evidence from unit root tests for bounded processes," American Journal of Economics and Sociology, Wiley Blackwell, vol. 82(4), pages 319-348, July.
    4. Joshua C. Hall, 2016. "Institutional convergence: exit or voice?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(4), pages 829-840, October.
    5. James E. Payne & James W. Saunoris & Saban Nazlioglu & Cagin Karul, 2023. "The convergence dynamics of economic freedom across U.S. states," Southern Economic Journal, John Wiley & Sons, vol. 89(4), pages 1216-1241, April.
    6. Beyaert, Arielle & García-Solanes, José & Lopez-Gomez, Laura, 2019. "Do institutions of the euro area converge?," Economic Systems, Elsevier, vol. 43(3).
    7. Kar, Sabyasachi & Roy, Amrita & Sen, Kunal, 2019. "The double trap: Institutions and economic development," Economic Modelling, Elsevier, vol. 76(C), pages 243-259.
    8. Daniela Wenzel, 2021. "Droughts and corruption," Public Choice, Springer, vol. 189(1), pages 3-29, October.
    9. Pérez-Moreno, Salvador & Bárcena-Martín, Elena & Ritzen, Jo, 2017. "Institutional diversity in the Euro area : Any evidence of convergence?," MERIT Working Papers 2017-047, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Usman Khalid, 2016. "Catch-up in Institutional Quality: An Empirical Assessment," Discussion Papers 2016-04, University of Nottingham, CREDIT.
    11. Roberto Ezcurra & Vicente Rios, 2013. "Is there cross-country convergence in government quality? A non-parametric analysis," Economics Bulletin, AccessEcon, vol. 33(4), pages 2661-2671.
    12. Andrew J. Hussey & Michael Jetter & Dianne McWilliam, 2021. "The Fundamental Determinants of Economic Inequality in Average Income Across Countries: The Declining Role of Political Institutions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 104-133, March.
    13. Bienvenido Ortega & Antonio Casquero & Jesús Sanjuán, 2016. "Corruption and Convergence in Human Development: Evidence from 69 Countries During 1990–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 691-719, June.
    14. Heckelman, Jac C. & Young, Andrew, 2018. "How Global is Globalization?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 48(3), August.
    15. Linda Glawe & Helmut Wagner, 2023. "The “Double Trap” in China—Multiple Equilibria in Institutions and Income and their Causal Relationship," Open Economies Review, Springer, vol. 34(3), pages 703-757, July.
    16. Schönfelder, Nina & Wagner, Helmut, 2018. "Institutional convergence in Europe," Economics Discussion Papers 2018-53, Kiel Institute for the World Economy (IfW Kiel).
    17. David Hulme & Antonio Savoia & Kunal Sen, 2015. "Governance as a Global Development Goal? Setting, Measuring and Monitoring the Post-2015 Development Agenda," Global Policy, London School of Economics and Political Science, vol. 6(2), pages 85-96, May.
    18. Wenzel, Daniela, 2018. "Droughts and Corruption," Working Paper 181/2018, Helmut Schmidt University, Hamburg.
    19. Georgescu, George, 2016. "Convergența instituțională a României cu Uniunea Europeană [Institutional convergence of Romania with the European Union]," MPRA Paper 70741, University Library of Munich, Germany.
    20. Glawe, Linda & Wagner, Helmut, 2021. "Convergence, divergence, or multiple steady states? New evidence on the institutional development within the European Union," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 860-884.
    21. Schönfelder, Nina & Wagner, Helmut, 2019. "Institutional convergence in Europe," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-23.
    22. Jordi López-Tamayo & Raul Ramos & Jordi Suriñach i Caralt, 2018. "Economic performance, social progress and institutional reform in European neighbouring countries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 60(3), pages 613-636, May.

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