The determinants of economic growth in emerging economies: a comparative analysis (original) (raw)

Role Of Institutions In Growth Of Countries

International Business & Economics Research Journal (IBER), 2011

The purpose of this paper was to look at the role of institutions in growth of countries. We compared income and quality of institutions data among 87 developing countries to see if institutions that promote economic freedom and investment lead to higher economic growth. In addition, we wanted to look at the role of institutions in economic growth at the local level in a country. For this analysis, we compared income and quality of institutions data for different states in India. In both cases, we found that growth is significantly affected by the quality of institutions.

Institutions and Growth: A Macroeconomic Framework

Institutions and Growth: A Macroeconomic Framework , 2022

This paper is an attempt to meet North's (1990) challenge to macroeconomists, and to incorporate Acemoglu et al.'s (2005, 2012) argument about the overarching role of political and economic institutions in long-run economic performance. This is done through a formal growth model in which goods and services produced by institutions are inputs to an endogenous capital and technology (or productivity) sector, which is the main driver for robust and steady long-run economic growth. Countries with institutions that protect property and contract rights and the rule of law, promote fiscal, monetary, and financial stability, sustain efficient financial intermediation, build and maintain public infrastructure, support education, training and digital technology, and are allocated sufficient resources for their enlargement and improvement in order to reduce production and transaction costs in the productivity sector, are likely to experience high and sustained rates of economic growth in the long term. The efficiency with which such institutions contribute to robust, long-term economic performance is measured by their marginal, externality impact on the productivity sector. In the case of less developed or poor countries, these externalities are either negligible or even negative. For developed countries, they are large and positive. For countries in transition, they start from small positive magnitudes and increasingly become large in their journey to developed or advanced status. Such key externalities are correlated with the six regularly published World Bank's Worldwide Governance Indicators (WGI). The effectiveness of growth policies and the speed of adjustment to long-term growth are determined by individual country values of the six WGI. Improvements of these WGIs are results of political decisions made by government officials and the body politic in a democratic society. Following analysis and discussion of the growth model, the paper concludes with several implications for a long-term growth strategy focused on improvements in the WGI and increased investments in the institutional and productivity sectors.

Do Institutions Cause Growth? Theory and Evidence from some Selected OIC Countries

Al Qasimia University Journal of Islamic Economics

The main purpose behind this empirical investigation was to establish a relationship between institutional factors and economic growth. For this purpose, a sample of 40 countries belonging to Organization of Islamic Cooperation (OIC) is utilized. Panel data for the period 2002-2018 is collected from internationally reliable sources and suitable econometric tools are employed for the estimation purpose. Results revealed that indeed institutional factors matter for achieving higher economic growth. Control of corruption is found to be the main driving forces behind the economic growth of OIC countries. Similarly, constrains both executive and political are detrimental for economic growth. Rule of law and government effectiveness have played a positive role in the growth process; however, they are insignificant statistically. The control variables such as trade openness and mean years of schooling have played their expected positive role in economic growth. Moreover, employment level o...

Institutions and Economic Growth

The objective of this paper is to study the effect of institutional factors on economic growth of a set of 37 developed and developing countries for six successive periods of five years, from 1975 until 2000, using a static panel data model. The key findings generated by this empirical test stipulate a dominant effect exerted by economic institutions on economic growth of the total sample of countries and developed countries.

Institutions, Development and Economic Growth

Comparative Economic Studies, 2008

While economic theory has traditionally focused on mostly physical and human capital and technology to explain economic growth, increased attention has been given to the institutional requirements for development. 'Failed transition experiments and financial crises in the 1990s revealed that even the basic prerequisites for development are incapable of delivering desired living standards in the absence of functioning institutions that support and enable economic incentives', write Theo Eicher and Cecilia Garcia-Penalosa in the introduction to this timely volume. It is a collection of papers from the 2004 CESifo Venice Summer Institute on Institutions and Growth, supported by the Centre of Economic Studies at Ludwig-Maximilians-University, Munich, and the Ifo Institute of Economic Research. Up to now economists have not been able to adequately demonstrate how institutions affect the large and unexplained differences in per capita incomes across the world. Many investigators have been trying to find out appropriate measures of institutions and how these institutions influence growth and development. In his chapter, 'On Institutions and Growth', Philippe Aghion develops an endogenous growth model with quality-improving innovations to determine the relationship between institutions, institutional change, and economic growth. According to the results he derives, financial development is the main determinant of an economy's ability to move growth rates and/or GDP per capita towards the technological frontier. 'Appropriate institutions' or policy designs affect productivity growth depending on the country's or sector's distance from the technological frontier. A country's distance from the technological frontier also affects the type of organisations in the economy. Academics have comparative advantage in the early stages of research, while private research has a comparative advantage in later stages. In a second chapter, Costas Azariadis and David de la Croix investigate the medium-and long-term impact of credit reform on the growth and distribution of income in a lifecycle economy with agents who differ in their ability to acquire human capital. The goal is to explain why slow implementation of reforms and liberalisation of financial markets could be

An Empirical Investigation of the Impact of Institutions on Economic Growth

International Review of Management and Business Research, 2021

This paper explores the impact of institutions on economic growth, measured in terms of Gross Domestic Product (GDP) per capita. A wide range of economic, non-economic, social, environmental and political factors contribute to economic growth and prosperity. Institutions are discussed as a range of array of regulatory and accountability mechanisms, beyond the boundaries of market functioning. This paper takes composite values of democracy index, vested interests, accountability, human rights and freedom of association and uses it as a proxy for institutions. A range of theoretical and empirical evidence, in addition to panel data analysis indicates positive role of institutions in economic growth.

Institutions as the Main Determinant in Economic Growth

ETIKONOMI

The studies on human capital and technological progress have given incredible insights on how countries in the world differ from one another. Yet there are more than those two reasons to account for differences among countries. There is a third reason why a country would differ in terms of its economic development progress, namely institutional factors. Hence developing institutional indices would give a deeper explanation than a mere theory. On the other hand, we can corroborate the institutional index with the general theory that low-quality institutions will impact an economy negatively. This study seeks to broaden the understanding of causes of economic growth by incorporating institutional index into a semi-endogenous growth model and finds a relationship between that index with human capital and technological progress