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AN ATTEMPT TO CRYSTALIZE THE BLACK-BOX MYSTERY: Institutional Quality or Constitutional Rights

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  • Saima SARWAR*
  • M. Wasif SIDDIQI**

Abstract

This study deals with deeper analysis of the role of domestic institutional framework in policy making process of developing nations. Grossman-Helpman (1994) model of ‘protection for sale’ has been used to extract the extent of welfarism in government decisions related to trade policy, i.e., how much the government puts weight on welfare of the society when designing a trade policy. Findings of the study report that it is not about the type of political regime actually, rather it is about the types of political institutions under different constitutional structures, i.e., parliamentary or presidential systems which matters in promoting welfarism in government policies. These findings facilitates in drawing the conclusion that not only the democracy, rather parliamentary natured are welfare-enhancing for developing nations when taking any policy decision. Moreover, the results also support that de jure (constitutional rules) institutions play more imperative role in decision making as compared to the de facto (governance) institutions.

Suggested Citation

  • Saima SARWAR* & M. Wasif SIDDIQI**, 2018. "AN ATTEMPT TO CRYSTALIZE THE BLACK-BOX MYSTERY: Institutional Quality or Constitutional Rights," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 28(1), pages 103-130.
    • Handle: RePEc:pje:journl:article28sumvii
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