IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/10201.html
   My bibliography  Save this paper

Poverty, Geography and Institutional Path Dependence

Author

Listed:
  • Tebaldi, Edinaldo
  • Mohan, Ramesh

Abstract

Using seven alternative measures of the institutions, this study examines the impacts of the quality of institutions on poverty rates in developing countries. The estimates obtained using the instrumental variable method (2SLS) show that the quality of institutions is negatively related with poverty rates and explain a significant portion of the variation in poverty rates across countries. More precisely, the empirical results suggest that an economy with a robust system to control corruption, market-friendly policies, a working judiciary system, and in which people have freedom to exercise their citizenship will create the necessary conditions to promote economic development and reduce poverty. The results suggest that pro-poor policies aimed at reducing poverty should first consider improving the quality of institutions in developing countries as a pre-requisite for economic development and poverty eradication.

Suggested Citation

  • Tebaldi, Edinaldo & Mohan, Ramesh, 2008. "Poverty, Geography and Institutional Path Dependence," MPRA Paper 10201, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:10201
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/10201/1/MPRA_paper_10201.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Breton, Theodore R., 2004. "Can institutions or education explain world poverty? An augmented Solow model provides some insights," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(1), pages 45-69, March.
    2. Stanley L. Engerman & Kenneth L. Sokoloff, 2025. "Institutional and Non-institutional Explanations of Economic Differences," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, edition 0, chapter 30, pages 757-784, Springer.
    3. Dani Rodrik, 2006. "Institutions for High-Quality Growth: What They Are and How to Acquire Them," Chapters, in: Kartik Roy & Jörn Sideras (ed.), Institutions, Globalisation and Empowerment, chapter 2, Edward Elgar Publishing.
    4. Alberto Chong & César Calderón, 2000. "Institutional quality and poverty measures in a cross-section of countries," Economics of Governance, Springer, vol. 1(2), pages 123-135, July.
    5. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
    6. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    7. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
    8. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    9. Alice Sindzingre, 2005. "Explaining Threshold Effects of Globalization on Poverty: an Institutional Perspective," WIDER Working Paper Series RP2005-53, World Institute for Development Economic Research (UNU-WIDER).
    10. Walter Enders & Gary Hoover, 2003. "The effect of robust growth on poverty: a nonlinear analysis," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1063-1071.
    11. Klasen, Stephan, 2008. "Economic Growth and Poverty Reduction: Measurement Issues using Income and Non-Income Indicators," World Development, Elsevier, vol. 36(3), pages 420-445, March.
    12. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    13. Pernia, Ernesto & Kakwani, Nanak, 2000. "What is Pro-poor Growth?," MPRA Paper 104987, University Library of Munich, Germany.
    14. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    15. A. Chong & C. Calderón, 2000. "Causality and Feedback Between Institutional Measures and Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 69-81, March.
    16. Tebaldi, Edinaldo & Elmslie, Bruce, 2008. "Do Institutions Impact Innovation?," MPRA Paper 8757, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel L. Bennett & Hugo J. Faria & James D. Gwartney & Daniel R. Morales, 2016. "Evaluating Alternative Measures of Institutional Protection of Private Property and Their Relative Ability to Predict Economic Development," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Summer 20), pages 57-78.
    2. Daniel L. Bennett & Hugo J. Faria & James D. Gwartney & Hugo M. Montesinos-Yufa & Daniel R. Morales & Carlos E. Navarro, 2017. "Evidence on economic versus political institutions as determinants of development," Working Papers 2017-04, University of Miami, Department of Economics.
    3. Mauricio Cárdenas, 2007. "Economic Growth in Colombia : a reversal of "fortune"?," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 25(53), pages 220-259, January.
    4. Mustapha Kamel Nabli, 2007. "Breaking the Barriers to Higher Economic Growth : Better Governance and Deeper Reforms in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 6914.
    5. Sambit Bhattacharyya, 2009. "Root Causes of African Underdevelopment," Journal of African Economies, Centre for the Study of African Economies, vol. 18(5), pages 745-780, November.
    6. Sambit Bhattacharyya & Steve Dowrick & Jane Golley, 2009. "Institutions and Trade: Competitors or Complements in Economic Development?," The Economic Record, The Economic Society of Australia, vol. 85(270), pages 318-330, September.
    7. Bhattacharyya, Sambit, 2009. "Institutions, diseases, and economic progress: a unified framework," Journal of Institutional Economics, Cambridge University Press, vol. 5(1), pages 65-87, April.
    8. Ruba Aljarallah, 2021. "An Analysis of the Impact of Rents from Non-renewable Natural Resources and Changes in Human Capital on Institutional Quality: A Case Study of Kuwait," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 224-234.
    9. Jane Frances, 2004. "Institutions, Firms and Economic Growth," Treasury Working Paper Series 04/19, New Zealand Treasury.
    10. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," EconStor Preprints 269878, ZBW - Leibniz Information Centre for Economics.
    11. Sambit Bhattacharyya, 2011. "Growth Miracles and Growth Debacles," Books, Edward Elgar Publishing, number 13609.
    12. Siddiqui, Danish Ahmed & Ahmed, Qazi Masood, 2013. "The effect of institutions on economic growth: A global analysis based on GMM dynamic panel estimation," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 18-33.
    13. Ahmet Faruk AYSAN & Mustapha Kamel NABLI & Marie‐Ange VÉGANZONÈS‐VAROUDAKIS, 2007. "Governance Institutions And Private Investment: An Application To The Middle East And North Africa," The Developing Economies, Institute of Developing Economies, vol. 45(3), pages 339-377, September.
    14. Chakraborty, Adrij, 2017. "Colonial Origins and Comparative Development: Institutions Matter," MPRA Paper 86320, University Library of Munich, Germany, revised Feb 2018.
    15. Andrea Asoni, 2008. "Protection Of Property Rights And Growth As Political Equilibria," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 953-987, December.
    16. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    17. Nobuhiro Mizuno & Katsuyuki Naito & Ryosuke Okazawa, 2017. "Inequality, extractive institutions, and growth in nondemocratic regimes," Public Choice, Springer, vol. 170(1), pages 115-142, January.
    18. Richard Bluhm & Adam Szirmai, 2011. "Institutions, Inequality and Growth: A review of theory and evidence on the institutional determinants of growth and inequality," Papers inwopa634, Innocenti Working Papers.
    19. Milan Žák & Petr Vymětal, 2006. "Institucionální aspekty nové komparativní ekonomie: ČR a EU [Institutional aspects of new comparative economy: Czech republic and European union]," Politická ekonomie, Prague University of Economics and Business, vol. 2006(5), pages 583-609.
    20. Kerekes, Monika, 2012. "Growth miracles and failures in a Markov switching classification model of growth," Journal of Development Economics, Elsevier, vol. 98(2), pages 167-177.

    More about this item

    Keywords

    Poverty Trap; Institutions; Development;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:10201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.