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Economic growth and quality of institutions in 27 postsocialist economies

Author

Listed:
  • Constantinos Alexiou
  • Sofoklis Vogiazas
  • Nikita Solovev

Abstract

Purpose - The relationship between institutional quality and economic growth is revisited. Design/methodology/approach - A panel cointegration methodology and causality analysis are applied to 27 postsocialist economies over the period from 1996 to 2016. Findings - Utilizing the Worldwide Governance Indicators as a means of assessing the quality of institutions, it is found that in the long run, economic growth is positively associated with the rule of law and voice and accountability. In the short run, regulatory quality retains a positive effect, but voice and accountability demonstrate a puzzling negative effect on economic growth that merits further analysis. In exploring the causal dimension of our variables, supporting evidence of the strong links between the quality of institutions and economic growth is provided, hence rendering robust results. Originality/value - To the best of the authors’ knowledge, it is the first time that an ARDL methodological framework, which addresses potential endogeneity issues, is used to investigate the relationship between institutional quality and growth in the context of postsocialist economies.

Suggested Citation

  • Constantinos Alexiou & Sofoklis Vogiazas & Nikita Solovev, 2020. "Economic growth and quality of institutions in 27 postsocialist economies," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(4), pages 769-787, March.
    • Handle: RePEc:eme:jespps:jes-02-2019-0069
    DOI: 10.1108/JES-02-2019-0069
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    Citations

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    Cited by:

    1. Alberto Costantiello & Angelo Leogrande, 2023. "The Impact of Voice and Accountability in the ESG Framework in a Global Perspective," Working Papers hal-04043775, HAL.
    2. Andrii Hrona, 2020. "Foreign Currency Refinancing As A New Element Of Stimulating The Economic Development Of Transition Economies," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 6(5).
    3. Khan, Muhammad Salar, 2022. "Absorptive capacities and economic growth in low- and middle-income economies," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 156-188.
    4. Destek, Mehmet Akif & Adedoyin, Festus & Bekun, Festus Victor & Aydin, Sercan, 2023. "Converting a resource curse into a resource blessing: The function of institutional quality with different dimensions," Resources Policy, Elsevier, vol. 80(C).
    5. Farzaneh KHALILI & Majid AFSHARIRAD & Abdolrahim HASHEMI DIZAJ & Mehdi YAZDANSHENAS BAHOGHOGH, 2021. "Spatial Linkage Between Quality Of Institution, Natural Resources Management With Gdp Per Capita In D8 Countries (Durbin Model In Panel Data)," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 239-256, June.
    6. Dragos Dinca, 2022. "An Assessment of Institutional Improvements in Romania and Bulgaria Following EU Accession," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 69(2), pages 293-316, June.
    7. Leogrande, Angelo, 2023. "The Rule of Law in the ESG Framework in the World Economy," MPRA Paper 116293, University Library of Munich, Germany.

    More about this item

    Keywords

    Economic growth; Post-socialist economies; Institutions; Governance indicators; Panel cointegration; Causality; O43; P40;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P40 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - General

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