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Assessing the relationship between institutions and economic development

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  • Butunoi, Ioana-Daria
  • Buzatu, Corina-Zenita
  • Jianu, Ionuț

Abstract

This paper explores how institutional quality influences economic development across EU Member States. Using 2022 data from Eurostat and the World Bank, we analyzed the relationship between institutional indicators (such as voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, control of corruption) and GDP per capita expressed in purchasing power standard (PPS). In this respect, we examined the correlation coefficients, which confirmed a strong link between institutions and economic performance. Northern European Union countries show both institutional strength and prosperity, while many Eastern and Southern European nations face weaker institutions and lower development. This study also assesses the institutional progress within the EU from 2013 to 2022.

Suggested Citation

  • Butunoi, Ioana-Daria & Buzatu, Corina-Zenita & Jianu, Ionuț, 2025. "Assessing the relationship between institutions and economic development," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32(4), pages 173-182.
    • Handle: RePEc:zbw:espost:334173
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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