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Obedience and Income Levels

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  • Joshua C. Hall

    (West Virginia University, College of Business and Economics)

  • Kaitlyn R. Harger

    (West Virginia University, College of Business and Economics)

Abstract

We revisit the relationship between informal institutions and income levels. The empirical literature on institutions finds that indices of "informal institutions" such as trust, respect, respect, self-determination, and obedience are more important than "formal institutions" such as constitutional constraints in explaining income levels across countries. We add to this literature in two ways. First, we separate out the index of informal institutions into its component parts to see which informal institutions are primary. Second, we construct two new measures of obedience to test the robustness of obedience. Our reduced-form results indicate the primacy of obedience over other informal institutions.

Suggested Citation

  • Joshua C. Hall & Kaitlyn R. Harger, 2014. "Obedience and Income Levels," Working Papers 14-21, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:14-21
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    More about this item

    Keywords

    informal institutions; formal institutions; culture; economic development;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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