Do Political Institutions Yield Multiple Growth Regimes?

Coyne, David; Tan, Chih Ming

doi:10.2139/ssrn.2018374

Do Political Institutions Yield Multiple Growth Regimes?

Economics Bulletin, Vol. 32 No. 2 pp. 1442-1454

13 Pages Posted: 9 Mar 2012 Last revised: 4 Jul 2012

See all articles by David Coyne

David Coyne

University of California, San Diego (UCSD) - Department of Economics

Chih Ming Tan

University of North Dakota - College of Business & Public Administration - Department of Economics

Date Written: May 14, 2012

Abstract

We investigate the effects of political institutions on economic growth. We specifically explore this relationship while controlling for heterogeneity and model uncertainty. We use threshold regression (Hansen (2000)) to search for possible nonlinearities and/or interaction effects with respect to political institutions. We also implement a novel approach to account for theory uncertainty by applying Bayesian model averaging in the threshold regression context. We find that less democratic countries, specifically those with less competitiveness in executive recruitment, follow a different growth process than those with higher competitiveness.

Keywords: Economic Growth, Institutions, Threshold Regression, Regression Trees, Bayesian Model Averaging

JEL Classification: C21, C51, O43, O47

Suggested Citation: Suggested Citation

Coyne, David and Tan, Chih Ming, Do Political Institutions Yield Multiple Growth Regimes? (May 14, 2012). Economics Bulletin, Vol. 32 No. 2 pp. 1442-1454, Available at SSRN: https://ssrn.com/abstract=2018374 or http://dx.doi.org/10.2139/ssrn.2018374