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Do Political Institutions Yield Multiple Growth Regimes?

Author

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  • David Coyne

    (Federal Reserve Bank of Boston, USA)

  • Chih Ming Tan

    (Clark University, USA)

Abstract

We investigate the effects of political institutions on economic growth. We specifically explore this relationship while controlling for heterogeneity and model uncertainty. We use threshold regression (Hansen (2000)) to search for possible nonlinearities and/or interaction effects with respect to political institutions. We also implement a novel approach to account for theory uncertainty by applying Bayesian model averaging in the threshold regression context. We find that less democratic countries, specifically those with less competitiveness in executive recruitment, follow a different growth process than those with higher competitiveness.

Suggested Citation

  • David Coyne & Chih Ming Tan, 2012. "Do Political Institutions Yield Multiple Growth Regimes?," Working Paper series 36_12, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:36_12
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    References listed on IDEAS

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    Cited by:

    1. Man, Georg, 2015. "Competition and the growth of nations: International evidence from Bayesian model averaging," Economic Modelling, Elsevier, vol. 51(C), pages 491-501.

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    More about this item

    Keywords

    Economic Growth; Institutions; Threshold Regression; Regression Trees; Bayesian Model Averaging;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • 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

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