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Do institutions matter more for services ?


  • Amin, Mohammad
  • Mattoo, Aaditya


Recent empirical research has focused on the role ofinstitutions in overall economic performance. This paper examines the impact of institutions on the relative performance of the service sector. Through cross-country level and growth regressions it establishes the following stylized fact: countries with better institutions have relatively larger and more dynamic service sectors. It suggests that regulatory and contract enforcing institutions play a key role in the development of service sectors because these sectors enter into a more complex web of transactions with the rest of the economy and are more prone to market failure due to asymmetric information.

Suggested Citation

  • Amin, Mohammad & Mattoo, Aaditya, 2006. "Do institutions matter more for services ?," Policy Research Working Paper Series 4032, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4032

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    References listed on IDEAS

    1. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
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    5. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    6. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1091-1126.
    7. James E. Anderson & Douglas Marcouiller, 2002. "Insecurity And The Pattern Of Trade: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 342-352, May.
    8. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
    9. Henri L. F. de Groot & Gert-Jan Linders & Piet Rietveld & Uma Subramanian, 2004. "The Institutional Determinants of Bilateral Trade Patterns," Kyklos, Wiley Blackwell, vol. 57(1), pages 103-123, February.
    10. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    11. Bolaky, Bineswaree & Freund, Caroline, 2004. "Trade, regulations, and growth," Policy Research Working Paper Series 3255, The World Bank.
    12. Poonam Gupta & James P. F. Gordon, 2004. "Understanding India’s Services Revolution," IMF Working Papers 04/171, International Monetary Fund.
    13. repec:cup:apsrev:v:87:y:1993:i:03:p:567-576_10 is not listed on IDEAS
    14. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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    Cited by:

    1. Aaditya Mattoo & Arvind Subramanian, 2009. "Criss-Crossing Globalization: Uphill Flows of Skill-Intensive Goods and Foreign Direct Investment," Working Paper Series WP09-7, Peterson Institute for International Economics.
    2. Ghani, Ejaz, 2012. "Service with a Smile," World Bank - Economic Premise, The World Bank, issue 96, pages 1-6, November.
    3. Hoekman, Bernard & Mattoo, Aaditya, 2008. "Services trade and growth," Policy Research Working Paper Series 4461, The World Bank.

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    Legal Products; Children and Youth; Economic Theory&Research; Public Sector Corruption&Anticorruption Measures; Corruption&Anitcorruption Law;

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