Do Economic Institutions Matter for Growth Episodes?

ESID Working Paper 92. Manchester: Effective States and Inclusive Development Research Centre, The University of Manchester, 2017

30 Pages Posted: 30 Nov 2017

See all articles by Sabyasachi Kar

Sabyasachi Kar

University of Delhi - Institute of Economic Growth (IEG)

Selim Raihan

University of Dhaka

Kunal Sen

University of Manchester

Date Written: October 17, 2017

Abstract

An increasingly large literature on the empirics of economic growth has viewed it as an ‘episodic phenomenon’. In this paper, we re-evaluate the relationship between growth and economic institutions using an episodic framework, where the relevant units of empirical analysis are growth episodes. We use episodes identified in Kar et al. (2013) and quantify their success using a novel 'measure' termed as 'episode magnitude', adopted from Pritchett et al. (2016). In order to capture the multi-functionality of economic institutions, we use separate measures for property rights institutions, contractual institutions and state capacity. Using instrumental variable methods, we show that, together with human capital and level of development, higher institutional quality is also a significant factor that determines more successful growth episodes.

Keywords: Economic Growth, Institutions, Episodes, State Capacity, Property Rights

Suggested Citation

Kar, Sabyasachi and Raihan, Selim and Sen, Kunal, Do Economic Institutions Matter for Growth Episodes? (October 17, 2017). ESID Working Paper 92. Manchester: Effective States and Inclusive Development Research Centre, The University of Manchester, 2017, Available at SSRN: https://ssrn.com/abstract=3067927 or http://dx.doi.org/10.2139/ssrn.3067927

Sabyasachi Kar

University of Delhi - Institute of Economic Growth (IEG) ( email )

Delhi, 110007
India

Selim Raihan

University of Dhaka ( email )

University of Dhaka
Ramna, Dhaka, 1000
Bangladesh

Kunal Sen (Contact Author)

University of Manchester ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

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