IDEAS home Printed from https://ideas.repec.org/p/zbw/esconf/322260.html
   My bibliography  Save this paper

Assessing the Impact of Institutions on Social Development

Author

Listed:
  • Jianu, Ionut
  • Tudorache, Maria-Daniela
  • Simion, Constantin-Stefan

Abstract

This paper examines the impact of institutions on income inequality in 27 European Union member states over the period 2011-2022, using the method Panel Estimated Generalized Least Squares. To catch the quality of institutions we used World Governance Indicators published by World Bank, especially those related to rule of law and political stability and absence of violence/terrorism. The results confirmed a negative relationship between institutional quality (rule of law, political stability and absence of violence/terrorism) and income inequality, indicating that the quality of the rules driving human action really matter and influences the dynamic of social development. In addition, we used additional variables to improve the quality of the model, by using variables related to labour market, education and household sectors. In this respect, we found a positive association between income inequality and other explanatory factors, such as school dropout, unemployment rate and the housing cost overburden rate. Even if the model is limited to five income inequality drivers, we have demonstrated that the calculated coefficients are not affected by multicollinearity or other model issues. In this respect, the estimation provides high confidence results, which can be fully taken into consideration by governments, when drafting policy measures oriented to tackle income inequality.

Suggested Citation

  • Jianu, Ionut & Tudorache, Maria-Daniela & Simion, Constantin-Stefan, 2025. "Assessing the Impact of Institutions on Social Development," EconStor Conference Papers 322260, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esconf:322260
    DOI: 10.2478/picbe-2025-0071
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/322260/1/Assessing-the-Impact-of-Institutions-on-Social-Development.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.2478/picbe-2025-0071?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
    2. Barriola, Illan & Deffains, Bruno & Musy, Olivier, 2023. "Law and inequality: A comparative approach to the distributive implications of legal systems," International Review of Law and Economics, Elsevier, vol. 75(C).
    3. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
    4. Yeonhwa Lee & Peter A. Kemp & Vincent J. Reina, 2022. "Drivers of housing (un)affordability in the advanced economies: a review and new evidence," Housing Studies, Taylor & Francis Journals, vol. 37(10), pages 1739-1752, October.
    5. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    6. 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.
    7. Katrin B. Anacker, 2019. "Introduction: housing affordability and affordable housing," European Journal of Housing Policy, Taylor and Francis Journals, vol. 19(1), pages 1-16, January.
    8. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2010. "Inequality and Unemployment in a Global Economy," Econometrica, Econometric Society, vol. 78(4), pages 1239-1283, July.
    9. George Galster & Kwan Ok Lee, 2021. "Housing affordability: a framing, synthesis of research and policy, and future directions," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 25(S1), pages 7-58, January.
    10. Katrin B. Anacker, 2019. "Introduction: housing affordability and affordable housing," International Journal of Housing Policy, Taylor & Francis Journals, vol. 19(1), pages 1-16, January.
    11. Glyn, Andrew, 1995. "Unemployment and inequality," Discussion Papers, Research Unit: Economic Change and Employment FS I 95-303, WZB Berlin Social Science Center.
    12. Perotti, Roberto, 1996. "Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-187, June.
    13. Sonora, Robert, 2019. "Income Inequality, Poverty, and the Rule of Law: Latin America vs the Rest of the World1," MPRA Paper 91512, University Library of Munich, Germany.
    14. Acemoglu, Daron, 2012. "Introduction to economic growth," Journal of Economic Theory, Elsevier, vol. 147(2), pages 545-550.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria-Daniela TUDORACHE & Ionuț JIANU, 2025. "Monitoring the implementation of the Sustainable Development Goals in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(644), A), pages 217-238, Autumn.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jianu Ionuț & Tudorache Maria-Daniela & Simion Constantin-Ștefan, 2025. "Assessing the Impact of Institutions on Social Development," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 19(1), pages 907-915.
    2. Aisen, Ari & Veiga, Francisco José, 2013. "How does political instability affect economic growth?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 151-167.
    3. Freund, Caroline & Jaud, Melise, 2013. "Regime Change, Democracy and Growth," CEPR Discussion Papers 9282, C.E.P.R. Discussion Papers.
    4. Absher, Samuel & Grier, Robin & Grier, Kevin, 2023. "The consequences of CIA-sponsored regime change in Latin America," European Journal of Political Economy, Elsevier, vol. 80(C).
    5. Facchini, François & Jaeck, Louis & Kratou, Hajer, 2024. "The growth-inequality debate revisited by rent-seeking theory: Some empirical evidence," European Journal of Political Economy, Elsevier, vol. 84(C).
    6. Imène Guetat, 2016. "Economic growth, government size and political instability," Post-Print hal-04097904, HAL.
    7. Robert MacCulloch & Silvia Pezzini, 2010. "The Roles of Freedom, Growth, and Religion in the Taste for Revolution," Journal of Law and Economics, University of Chicago Press, vol. 53(2), pages 329-358, May.
    8. Samer Matta & Michael Bleaney & Simon Appleton, 2022. "The economic impact of political instability and mass civil protest," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 253-270, March.
    9. Hans Gersbach & Lars-H. Siemers, 2014. "Can democracy induce development? A constitutional perspective," Public Choice, Springer, vol. 159(1), pages 177-196, April.
    10. Nobuhiro Mizuno & Katsuyuki Naito & Ryosuke Okazawa, 2017. "Inequality, extractive institutions, and growth in nondemocratic regimes," Public Choice, Springer, vol. 170(1), pages 115-142, January.
    11. Md. Shahinul Islam & Md. Al Amin & Md. Billal Hossain & SM Al Imran & Nusrat Jahan & Fahad Bin Asad & Abdullah Al Mamun, 2024. "The Role of Fiscal Policy in Economic Growth: A Comparative Analysis of Developed and Developing Countries," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(12), pages 1361-1371, December.
    12. Uwe Sunde, 2006. "Wirtschaftliche Entwicklung und Demokratie – Ist Demokratie ein Wohlstandsmotor oder ein Wohlstandsprodukt?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(4), pages 471-499, November.
    13. Brooks, Weston, 2025. "The linkage of economic growth, income inequality, and military expenditure," MPRA Paper 123787, University Library of Munich, Germany.
    14. José Antonio Alonso & Carlos Garcimartín & Luis Rivas, 2011. "Taxes, Foreign Aid and Quality of Governance Institutions," Chapters, in: Mehmet Ugur & David Sunderland (ed.), Does Economic Governance Matter?, chapter 7, Edward Elgar Publishing.
    15. Lopez , J. Humberto & Perry, Guillermo, 2008. "Inequality in Latin America : determinants and consequences," Policy Research Working Paper Series 4504, The World Bank.
    16. Elias Papaioannou & Gregorios Siourounis, 2008. "Democratisation and Growth," Economic Journal, Royal Economic Society, vol. 118(532), pages 1520-1551, October.
    17. Knight, John, 2013. "The economic causes and consequences of social instability in China," China Economic Review, Elsevier, vol. 25(C), pages 17-26.
    18. Cervellati Matteo & Fortunato Piergiuseppe & Sunde Uwe, 2012. "Consensual and Conflictual Democratization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-51, December.
    19. José Antonio Alonso & Carlos Garcimartín, 2011. "Does Aid Hinder Tax Efforts? More Evidence," Discussion Papers 11/04, University of Nottingham, CREDIT.
    20. Bo Sui & Chun-Ping Chang & Yin Chu, 2021. "Political Stability: an Impetus for Spatial Environmental Spillovers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 387-415, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:esconf:322260. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.