Political Institutions and Growth Collapses

24 Pages Posted: 22 May 2000

See all articles by Alejandro Gaviria

Alejandro Gaviria

Universidad de los Andes, Colombia - Department of Economics

Ugo Panizza

Graduate Institute of International and Development Studies (IHEID) - Department of Economics; CEPR

Ernesto Stein

Inter-American Development Bank (IDB)

Jessica Seddon

Graduate School of International Relations and Pacific Studies (IRPS), Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2000

Abstract

This paper tests whether Rodrik's (1999) results that institutions for conflict management are associated with the ability to react to economic shocks are robust to different ways of defining the quality of such institutions. We measure the quality of conflict management institutions with two different indices. The first is an index of political constraints on the ability of the executive to impose its will. These constraints limit the ability of the government to arbitrarily change the rules of the game and therefore may reduce redistributive struggles. The second index measures the degree of political particularism. We define political particularism as the policymakers' ability to further their career by catering to narrow interests rather than broader national platforms. The indices used in this paper solve the endogeneity and subjectivity biases that affect Rodrik's main measure of institutional quality. We find strong support for the idea that high levels of political constraints and intermediate levels of political particularism are associated with a quick recovery from economic shocks.

JEL Classification: D74, K1, O1

Suggested Citation

Gaviria, Alejandro and Panizza, Ugo and Stein, Ernesto Hugo and Seddon Wallack, Jessica, Political Institutions and Growth Collapses (March 2000). Available at SSRN: https://ssrn.com/abstract=220452 or http://dx.doi.org/10.2139/ssrn.220452

Alejandro Gaviria (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

Ugo Panizza

Graduate Institute of International and Development Studies (IHEID) - Department of Economics ( email )

Geneva Avenue de la Paix 11A
Geneva, 1202
Switzerland

CEPR ( email )

London
United Kingdom

Ernesto Hugo Stein

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue, NW
Research Department
Washington, DC 20577
United States

Jessica Seddon Wallack

Graduate School of International Relations and Pacific Studies (IRPS), Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States
(858) 822 5733 (Phone)
(858) 534 3939 (Fax)

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