Do economic institutions matter for growth episodes?
This paper re-evaluates the relationship between growth and economic institutions using an episodic framework
Abstract
An increasingly large literature on the empirics of economic growth has viewed it as an ‘episodic phenomenon’.
In this paper, we re-evaluate the relationship between growth and economic institutions using an episodic framework, where the relevant units of empirical analysis are growth episodes. We use episodes identified in Kar et al. (2013) and quantify their success using a novel ‘measure’ termed as ‘episode magnitude’, adopted from Pritchett et al. (2016). In order to capture the multi-functionality of economic institutions, we use separate measures for property rights institutions, contractual institutions and state capacity.
Using instrumental variable methods, we show that, together with human capital and level of development, higher institutional quality is also a significant factor that determines more successful growth episodes.
This output is part of the Effective States and Inclusive Development Research Centre programme
Citation
Kar, S., Raihan, S. and Sen, K. (2017) Do economic institutions matter for growth episodes? ESID Working Paper No. 92. Manchester, UK: The University of Manchester.
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