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Political Institutions, Technology and Growth: a dynamic panel approach


  • Zuazu Bermejo, Izaskun


This paper investigates whether the effect of political institutions on sectoral economic performance is determined by the level of technological development of industries. Building on previous studies on the linkages among political institutions, technology and economic growth, we employ the dynamic panel Generalized Method of Moments (GMM) estimator for a sample of 4,134 country-industries from 61 industries and 89 countries over the 1990-2010 period. Our main findings suggest that changes of political institutions towards higher levels of democracy, political rights and civil liberties enhance economic growth in technologically developed industries. On the contrary, the same institutional changes might retard economic growth of those industries that are below a technological development threshold. Overall, these results give evidence of a technologically conditioned nature of political institutions to be growth-promoting.

Suggested Citation

  • Zuazu Bermejo, Izaskun, 2015. "Political Institutions, Technology and Growth: a dynamic panel approach," IKERLANAK Ikerlanak;2015-94, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  • Handle: RePEc:ehu:ikerla:16266

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    More about this item


    political; institutions; technological; develogical; development; dynamic; panel; data;

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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