Institutional Transformations, Polity and Economic Outcomes: Testing the North-Wallis-Weingast Doorsteps Framework

58 Pages Posted: 28 Mar 2012 Last revised: 20 Apr 2012

See all articles by Marc Quintyn

Marc Quintyn

International Monetary Fund (IMF)

Sophia Gollwitzer

Graduate Institute of International and Development Studies (IHEID)

Date Written: March 27, 2012

Abstract

This paper tests the theoretical framework developed by North, Wallis and Weingast (2009) on the transition from closed to open access societies. They posit that societies need to go through three doorsteps: the establishment of rule of law among elites; the adoption of perpetually existing organizations; and the political control of the military. We identify indicators reflecting these doorsteps and graphically test the correlation between them and a set of political and economic variables. Finally, through Identification through Heteroskedasticity we test these relationships econometrically. The paper broadly confirms the logic behind the doorsteps as necessary steps in the transition to open access societies. The doorsteps influence economic and political processes, as well as each other, with varying intensity. We also identify income inequality as a potentially important force leading to social change.

Keywords: institutions, economic performance, political performance, transition

JEL Classification: B52, E11, E19, K0, O10, O17, P16

Suggested Citation

Quintyn, Marc and Gollwitzer, Sophia, Institutional Transformations, Polity and Economic Outcomes: Testing the North-Wallis-Weingast Doorsteps Framework (March 27, 2012). IMF Working Paper No. 12/87. Available at SSRN: https://ssrn.com/abstract=2029393 or http://dx.doi.org/10.2139/ssrn.2029393

Marc Quintyn (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Sophia Gollwitzer

Graduate Institute of International and Development Studies (IHEID) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

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