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A New Way To Link Development To Institutions, Policies And Geography

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  • Sudip Ranjan Basu

Abstract

The paper aims to examine the role of institutions relative to economic policy and geography in explaining the diff erential level of development across countries over time. To that end, it att empts to construct a Development Quality Index (DQI) and an Institutional Quality Index (IQI) using multivariate statistical method of principal components. It shows that (i) higher level of IQI along with economic policy and geography factors lead to a positive improvement in the level of DQI; and that (ii) results remain robust for IQI and relatively robust for economic policy and geography even when it is compared across cross-section and panel data estimation for a set of 102 countries over 1980 to 2004. The results strongly indicate that institutions matt er in the context of specifi c economic policy mixes and geography-related factors illustrated by disease burden, etc. It demonstrates that relative infl uence of institutions varies across stages of development.

Suggested Citation

  • Sudip Ranjan Basu, 2008. "A New Way To Link Development To Institutions, Policies And Geography," UNCTAD Blue Series Papers 37, United Nations Conference on Trade and Development.
    • Handle: RePEc:unc:blupap:37
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    4. S. Terzi & A. Trezzini & L. Moroni, 2014. "A PLS path model to investigate the relations between institutions and human development," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1271-1290, May.
    5. Sudip Ranjan Basu, 2008. "Institution and Development Revisited:A Nonparametric Approach," IHEID Working Papers 05-2008, Economics Section, The Graduate Institute of International Studies, revised Mar 2008.
    6. Bhupatiraju S. & Verspagen B., 2013. "Economic development, growth, institutions and geography," MERIT Working Papers 2013-056, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Sudip Ranjan Basu & Monica Das, 2011. "Export Structure And Economic Performance In Developing Countries: Evidence From Nonparametric Methodology," UNCTAD Blue Series Papers 48, United Nations Conference on Trade and Development.
    8. Dawood Mamoon & S. Mansoob Murshed, 2017. "When Education Explains Strong Institutions: Trade Policy also Matters," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 1179-1210, April.
    9. Subarna Basnet, 2017. "Institutions and Economic Growth of Landlocked Nations – part of dissertation," CEsA Working Papers 156, CEsA - Centre for African and Development Studies.
    10. Anselm Komla Abotsi, 2018. "Tolerable Level of Corruption for Foreign Direct Investment in Europe and Asia," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(3), September.
    11. Efendic, Adnan & Pugh, Geoff & Adnett, Nick, 2011. "Institutions and economic performance: A meta-regression analysis," European Journal of Political Economy, Elsevier, vol. 27(3), pages 586-599, September.
    12. Tamilina, Larysa & Tamilina, Natalya, 2012. "When formal institutions fail in fostering economic growth: the case of post-communist countries," MPRA Paper 48352, University Library of Munich, Germany, revised 01 Nov 2012.
    13. Nathaniel Karp & Boyd Nash-Stacey, 2015. "Technology, Opportunity & Access: Understanding Financial Inclusion in the U.S," Working Papers 1525, BBVA Bank, Economic Research Department.

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    More about this item

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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