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Do Institutions Matter for Regional Economic Growth and Development? The Case of Turkey

  • Serkan Degirmenci


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    Many cross-country studies acknowledge the indispensable role of institutions in promoting economic growth and in sustaining economic development. So, their emphases have shifted to determine the most influential institution(s) in order to be specific. While these papers are widespread in the recent literature, the role of institutions within-country level has not been yet discussed in detail. Although the formal institutional structures of many nation-state countries apply to their all regions, results may differ depending upon various conditions. Considering these differentiated outcomes, this study aims to discuss the roles and functions of institutions in regional economic growth and development. To that end, first objective of this paper is to provide an introductory background by surveying and systematically documenting the evidences on the impact of institutions on regional growth and development outcomes from both the theoretical and empirical studies within a voluminous literature. Second objective is to elaborate this survey by classifying these studies with respect to their different conceptions about “institutions†and to their methodological approaches adopted. By doing that, this paper try to propose an analytical framework that identifies the channels of influence between institutions and economic performance outcomes. As the main concern of that study, third objective is to discuss whether institutions really matter for regional economic growth and development and, if so, how can institutions be included in the regional growth and development policies. Turkey is a convenient example for this discussion. Although its fundamental written institutions have a countrywide validity, their density and quality varies among regions. So, lastly, it is planned to be done an empirical exercise to reveal the linkages between prominent characteristics of these regional institutions and economic performances of regions for the case of Turkey. To sum up, the novelty of this paper is to provide an extensive but a systematic survey of many studies in related literature and to contribute in part to the empirics of the relationship between institutions and regional economic growth and development. Finally, it is expected to obtain a sound understanding about the institutional approach both in economic growth and economic development spheres within the regional context.

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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p1180.

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    Date of creation: Sep 2011
    Date of revision:
    Handle: RePEc:wiw:wiwrsa:ersa11p1180
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    1. Howitt, Peter & Mayer-Foulkes, David & Aghion, Philippe, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," Scholarly Articles 4481509, Harvard University Department of Economics.
    2. Kogel, Tomas, 2005. "Youth dependency and total factor productivity," Journal of Development Economics, Elsevier, vol. 76(1), pages 147-173, February.
    3. Andrés Rodríguez-Pose, 2010. "Do institutions matter for regional development?," Working Papers 2010-02, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    4. repec:cup:cbooks:9780521574471 is not listed on IDEAS
    5. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
    6. Vijayaraghavan, Maya & Ward, William A., 2001. "Institutions and Economic Growth: Empirical Evidence for a Cross-National Analysis," Working Papers 112952, Clemson University, Center for International Trade.
    7. Andres Rodriguez-Pose & Michael Storper, 2006. "Better Rules or Stronger Communities? On the Social Foundations of Institutional Change and Its Economic Effects," Sciences Po publications info:hdl:2441/f0uohitsgqh, Sciences Po.
    8. repec:cup:cbooks:9780521451895 is not listed on IDEAS
    9. Aron, Janine, 2000. "Growth and Institutions: A Review of the Evidence," World Bank Research Observer, World Bank Group, vol. 15(1), pages 99-135, February.
    10. Bockstette, Valerie & Chanda, Areendam & Putterman, Louis, 2002. " States and Markets: The Advantage of an Early Start," Journal of Economic Growth, Springer, vol. 7(4), pages 347-69, December.
    11. Claudia Williamson, 2009. "Informal institutions rule: institutional arrangements and economic performance," Public Choice, Springer, vol. 139(3), pages 371-387, June.
    12. Bardhan, Pranab & Udry, Christopher, 1999. "Development Microeconomics," OUP Catalogue, Oxford University Press, number 9780198773719.
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