The Measurement and Determination of Institutional Change: Evidence from Transition Economics
It is widely appreciated that institution building is at the heart of the transition process. Without functioning institutions markets cannot work effectively and the sustainability of the economic transition process can be undermined. The crisis in Russia provided just one piece of evidence in this regard. While institutions are central to the transition process, institutional reform is not an area that is well understood by researchers and policy makers alike. In this paper we examine the determinants of institutional change using a panel dataset comprising 25 transition economics. One of the defining characteristics of our approach is that we treat institutional change as a multidimensional unobserved variable, accounting for the fact each of our indicators represents a noisy signal.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zellner, Arnold, 1970. "Estimation of Regression Relationships Containing Unobservable Independent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(3), pages 441-454, October.
- Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June.
- Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
- de Melo, Martha & Denizer, Cevdet & Gelb, Alan & Tenev, Stoyan, 1997. "Circumstance and choice : the role of initial conditions and policies in transition economies," Policy Research Working Paper Series 1866, The World Bank.
- Goldberger, Arthur S, 1972. "Maximum-Likelihood Estimation of Regressions Containing Unobservable Independent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 1-15, February.
- Spanos, Aris, 1984. "Liquidity as a Latent Variable-An Application of the MIMIC Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 46(2), pages 125-143, May.
- Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
- Ohlson, James A., 1979. "Risk, Return, Security-Valuation and the Stochastic Behavior of Accounting Numbers," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 14(02), pages 317-336, June.
- Muthen, Bengt, 1983. "Latent variable structural equation modeling with categorical data," Journal of Econometrics, Elsevier, vol. 22(1-2), pages 43-65.
- Avery, Robert B., 1979. "Modeling monetary policy as an unobserved variable," Journal of Econometrics, Elsevier, vol. 10(3), pages 291-311, August.
- Robinson, P M, 1974. "Identification, Estimation and Large-Sample Theory for Regressions Containing Unobservable Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(3), pages 680-692, October.
- Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
- Lahiri, Kajal, 1976. "Inflationary Expectations: Their Formation and Interest Rate Effects," American Economic Review, American Economic Association, vol. 66(1), pages 124-131, March.
- Watson, Mark W. & Engle, Robert F., 1983. "Alternative algorithms for the estimation of dynamic factor, mimic and varying coefficient regression models," Journal of Econometrics, Elsevier, vol. 23(3), pages 385-400, December.
- Aigner, Dennis J. & Hsiao, Cheng & Kapteyn, Arie & Wansbeek, Tom, 1984. "Latent variable models in econometrics," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 23, pages 1321-1393 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:cam:camdae:0029. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer)
If references are entirely missing, you can add them using this form.