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Institutions and Economic Development. New tests and new doubts

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  • Angeles, Luis

Abstract

Is institutional quality a major driver of economic development? This paper tackles the question by focusing on the within-country variation of growth rates of GDP per capita. While previous attempts using this methodology have controlled for many of the standard de- terminants of the empirical growth literature, we argue that such ap- proach is not adequate if good institutions are the main reason behind decisions to invest in human or physical capital accumulation or to engage in international trade. Our regressions exclude the proximate causes of growth in order to estimate the overall e¤ect of institutional quality. Perhaps surprisingly, we nd no support for the thesis that institutional quality improves economic growth. These results encourage a reconsideration of the evidence provided elsewhere in the literature.

Suggested Citation

  • Angeles, Luis, 2010. "Institutions and Economic Development. New tests and new doubts," SIRE Discussion Papers 2010-75, Scottish Institute for Research in Economics (SIRE).
    • Handle: RePEc:edn:sirdps:204
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    File URL: http://hdl.handle.net/10943/204
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    1. Luis Angeles, 2011. "Institutions, Property Rights, and Economic Development in Historical Perspective," Kyklos, Wiley Blackwell, vol. 64(2), pages 157-177, May.
    2. Puruweti Siyakiya, 2017. "The Impact of Institutional Quality on Economic Performance: An Empirical Study of European Union 28 and Prospective Member Countries," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 3(2), pages 3-24, December.

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