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Institutions and economic performance: a review of the theory and evidence

  • Ugur, Mehmet

The aim of this article is to take stock of the theoretical debate and empirical findings concerning the impact of institutions on economic performance and the channels through which the institutional impact unfolds. The review is limited to work published until 2004 due to space limitations and the exponential increase in the literature after 2004 – a development that justifies a separate review in itself. We trace the evolution of the institutional approach, identify the channels through which institutional quality might affect economic performance, report the empirical findings, and assess the institutional approach’s contribution to economic analysis and policy design. Our findings suggest that the institutional approach has made both theoretical and empirical contributions to economics research and has inspired policy debate, but the debate is lopsided with its focus on developing countries only.

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File URL: http://mpra.ub.uni-muenchen.de/25909/1/MPRA_paper_25909.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25909.

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Date of creation: Sep 2010
Date of revision: Oct 2010
Handle: RePEc:pra:mprapa:25909
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