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Open For Business? Institutions, Business Environment and Economic Development


  • Robert Gillanders
  • Karl Whelan


Recent years have seen a significant focus in the literature on growth and development on the idea that legal and political institutions are the key determinant of economic development. The main finding of this paper is that the focus on the primacy of legal and political institutions may be misplaced and that business-friendly economic policies (proxied for here by the World Bank’s Doing Business indicator) are the key determinant of the level of income per capita. We find that a country’s Doing Business rank dominates a range of measures of legal and political institutional quality as an explanatory variable for income per capita. We also find the Doing Business rank to be a key explanatory variable for economic growth and that previous findings assigning a significant role to educational attainment are not robust to the inclusion of this new indicator in growth regressions.

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  • Robert Gillanders & Karl Whelan, 2010. "Open For Business? Institutions, Business Environment and Economic Development," Working Papers 201040, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:201040

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    1. repec:seg:012016:v:2:y:2017:i:2:p:46-69 is not listed on IDEAS
    2. Breen, Michael & Gillanders, Robert, 2017. "Does Corruption Ease the Burden of Regulation? National and Subnational Evidence," MPRA Paper 82088, University Library of Munich, Germany.
    3. Adrian Corcoran & Robert Gillanders, 2015. "Foreign direct investment and the ease of doing business," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(1), pages 103-126, February.
    4. Davies, Ronald B., 2013. "The silver lining of red tape," Journal of Public Economics, Elsevier, vol. 101(C), pages 68-76.
    5. Michael Breen & Robert Gillanders, 2012. "Corruption, institutions and regulation," Economics of Governance, Springer, vol. 13(3), pages 263-285, September.
    6. Philip R. Lane, 2013. "Growth And Adjustment Challenges For The Euro Area," The Economic and Social Review, Economic and Social Studies, vol. 44(2), pages 273-295.
    7. repec:rmk:rmkbae:v:4:y:2017:i:2:p:37-49 is not listed on IDEAS
    8. Valentina Diana RUSU & Angela ROMAN, 2016. "The Business Environment In Cee Countries: Current Challenges And Perspectives," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8(1), pages 128-147, March.

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    Determinants of development; Economic policy; Economic growth;

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