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Do island states have better institutions?

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  • Congdon Fors, Heather

Abstract

Since the end of World War II, the number of countries in the world has increased dramatically. Many of these newly independent countries are small both in terms of population and geography, and several are islands. The purpose of this paper is to explore the effects of island status and country size on institutional quality, and to determine if these institutional effects can explain the relatively strong economic performance of islands and small countries. I distinguish between political institutions (Democracy) and economic institutions (Rule of Law). One of the main findings of this paper is that the relationship between island status and institutional quality is significantly positive, and that these results are robust to the inclusion of a number of control variables. Further, I find that country size is negatively related to institutional quality, which is in keeping with previous results. These results provide further support for the hypothesis that institutions account for these countries’ relatively better economic performance.

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  • Congdon Fors, Heather, 2014. "Do island states have better institutions?," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 34-60.
    • Handle: RePEc:eee:jcecon:v:42:y:2014:i:1:p:34-60
    DOI: 10.1016/j.jce.2013.06.007
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    More about this item

    Keywords

    Democracy; Rule of law; Islands; Country size; Comparative economics; Colonialism;
    All these keywords.

    JEL classification:

    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

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