Business Intelligence

Political Versus Economic Institutions In The Growth Process

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Executive Summary

After a decade of research on the relationship between institutions and growth, scholars in this field seem to be divided. Economic institutions perform well in growth regressions and a body of literature argues that this supports the key importance of institutions for development. Other authors maintain that the types of constraints that the recent theoretical literature describes are the more stable political institutions, and these have been found to play no role in empirical growth analyses. In this paper, the authors re-examine the role that institutions play in the growth process using cross-section and panel data for both developed and developing economies over the period 1970-2000.

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