Do Institutions Matter More for Services?

43 Pages Posted: 20 Apr 2016

See all articles by Aaditya Mattoo

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

Date Written: October 1, 2006

Abstract

Recent empirical research has focused on the role of institutions in overall economic performance. This paper examines the impact of institutions on the relative performance of the service sector. Through cross-country level and growth regressions it establishes the following stylized fact: countries with better institutions have relatively larger and more dynamic service sectors. It suggests that regulatory and contract enforcing institutions play a key role in the development of service sectors because these sectors enter into a more complex web of transactions with the rest of the economy and are more prone to market failure due to asymmetric information.

Keywords: Legal Products, Children and Youth, Economic Theory & Research, Public Sector Corruption & Anticorruption Measures, Corruption & Anitcorruption Law

Suggested Citation

Mattoo, Aaditya, Do Institutions Matter More for Services? (October 1, 2006). World Bank Policy Research Working Paper No. 4032. Available at SSRN: https://ssrn.com/abstract=937527

Aaditya Mattoo

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/amattoo

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