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Should we care about the uncertainty around measures of political-economic development?

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  • Desbordes, Rodolphe
  • Koop, Gary

Abstract

Several proxies of political–economic development, such as the Worldwide Governance Indicators, come in the form of an estimate along with a standard error reflecting the uncertainty of this estimate. Existing empirical work discards the information provided by the standard errors. We argue that the appropriate practice should be to take into account this additional information through the use of multiple imputation. We investigate the importance of our proposed approach in several applications. We find that accounting for the uncertainty around the values of various measures of political–economic development tends to have a large influence on the magnitude and statistical significance of the estimated effects of these variables.

Suggested Citation

  • Desbordes, Rodolphe & Koop, Gary, 2016. "Should we care about the uncertainty around measures of political-economic development?," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 752-763.
    • Handle: RePEc:eee:jcecon:v:44:y:2016:i:3:p:752-763
    DOI: 10.1016/j.jce.2015.08.002
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    Cited by:

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    2. Simplice A. Asongu & Joseph Nnanna & Vanessa S. Tchamyou, 2020. "Finance, Institutions and Private Investment in Africa," Working Papers of the African Governance and Development Institute. 20/080, African Governance and Development Institute..
    3. Claudio Detotto & Sauveur Giannoni & Claire Goavec, 2017. "Does good governance attract tourists?," Working Papers 002, Laboratoire Lieux, Identités, eSpaces et Activités (LISA).
    4. Stijn Ronsse & Samuel Standaert, 2017. "Combining growth and level data: An estimation of the population of Belgian municipalities between 1880 and 1970," Historical Methods: A Journal of Quantitative and Interdisciplinary History, Taylor & Francis Journals, vol. 50(4), pages 218-226, October.

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    More about this item

    Keywords

    Democracy; Income inequality; Governance; Multiple imputation; Uncertainty;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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