On the Empirics of Institutions and Quality of Growth: Evidence for Developing Countries

African Governance and Development Institute WP/15/041

21 Pages Posted: 4 Oct 2015

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Oasis Kodila-Tedika

University of Kinshasa - Department of Economics

Date Written: September 2015

Abstract

We explore a newly available dataset on quality of growth to investigate the effect of institutions on growth quality in 93 developing countries for the period 1990 to 2011. Quality of institutions is measured in term of political risk. The empirical evidence is based on: (i) Ordinary Least Squares (OLS) and Two Stage Least Squares (2SLS) and (ii) cross-sectional and panel data structures. In order to avail room for more policy implications, the dataset is further disaggregated into income levels, namely: Lower middle income (LMIC), low income (LI) and upper middle income (UMIC). Three main findings are established. First, institutions are positively related to the quality of growth. Second, institutions have significantly contributed to growth quality in increasing order during the following time intervals: 2005-2011, 1995-1999 and 2000-2004. Third, the positive nexus between institutions and growth quality is fundamentally driven by LMIC. Policy implications are discussed.

Keywords: Quality of growth; Institutions; Social indicators

JEL Classification: O40, O55, I10

Suggested Citation

Asongu, Simplice and Kodila-Tedika, Oasis, On the Empirics of Institutions and Quality of Growth: Evidence for Developing Countries (September 2015). African Governance and Development Institute WP/15/041. Available at SSRN: https://ssrn.com/abstract=2668581 or http://dx.doi.org/10.2139/ssrn.2668581

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Oasis Kodila-Tedika

University of Kinshasa - Department of Economics ( email )

Kinshasa
Democratic Republic of the Congo

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