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
Date Written: October 17, 2017
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: Suggested Citation