What Determines the Quality of Institutions?
In trying to explain institutional quality, different authors have come to conflicting conclusions. In tackling the problem themselves, the authors show three things. First, openness is positively and pretty robustly associated with institutional q...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/01/1687157/determines-quality-institutions http://hdl.handle.net/10986/15725 |
| Summary: | In trying to explain institutional
quality, different authors have come to conflicting
conclusions. In tackling the problem themselves, the authors
show three things. First, openness is positively and pretty
robustly associated with institutional quality. To minimize
selection bias, the authors use data sets with the greatest
cross-country coverage, though they also test the
significance of the variables for smaller sample sizes. The
results confirm that both natural and policy measures of
openness are important. Concentration of trade in natural
resource exports continues to be associated with poor
institutional quality after openness in trade is accounted
for. Second, "social" variables, such as income
inequality or ethnic diversity, are not associated with
institutional quality. The significance of the inequality
variable disappears when continent dummy variables are
included for Africa and Latin America. Third, features of
specific institutions, such as freedom of the press and
checks and balances in the political system, are positively
associated with overall perceptions of institutional
quality. These findings hold strongly across different data
sets and samples even after the authors control for the
variables commonly used in the literature. |
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