Institutional Changes Now and Benefits Tomorrow: How Soon is Tomorrow?

39 Pages Posted: 8 Jun 2009

See all articles by Pierre-Guillaume Meon

Pierre-Guillaume Meon

Université Libre de Bruxelles (ULB); Université Robert Schuman Strasbourg III

Khalid Sekkat

Université Libre de Bruxelles (ULB)

Laurent Weill

University of Strasbourg - LaRGE Research Center (Laboratoire de Recherche en Gestion et Economie)

Abstract

This paper investigates the timing of the impact of changes in checks and balances on macroeconomic efficiency in a panel of countries. Using Battese and Coelli's one-stage approach, we find that increasing checks and balances results in greater efficiency. Furthermore, the impact of institutional changes on efficiency is delayed, with a full effect showing after five to six years. This finding remains robust after distinguishing developed and developing countries, including country-fixed effects and using alternative functional forms of the production frontier and alternative measures of checks and balances. The relation is also robust to controlling for endogeneity.

Suggested Citation

Meon, Pierre-Guillaume and Sekkat, Khalid and Weill, Laurent, Institutional Changes Now and Benefits Tomorrow: How Soon is Tomorrow?. Economics & Politics, Vol. 21, Issue 2, pp. 319-357, July 2009, Available at SSRN: https://ssrn.com/abstract=1415090 or http://dx.doi.org/10.1111/j.1468-0343.2009.00351.x

Pierre-Guillaume Meon (Contact Author)

Université Libre de Bruxelles (ULB) ( email )

CP 132 Av FD Roosevelt 50
Brussels, Brussels 1050
Belgium

Université Robert Schuman Strasbourg III ( email )

47, Avenue de la Foret-Noire
Institut d'Etudes Politiques
67082 Strasbourg Cedex
France
33 3 88 41 77 21 (Phone)
33 3 88 41 77 78 (Fax)

Khalid Sekkat

Université Libre de Bruxelles (ULB) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

Laurent Weill

University of Strasbourg - LaRGE Research Center (Laboratoire de Recherche en Gestion et Economie) ( email )

61 Avenue de la Forêt Noire
F-67085 Strasbourg Cedex
France

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