Social and institutional factors of economic development: evidence from Europe

Helje Kaldaru () and Eve Parts ()
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Helje Kaldaru: Faculty of Economics and Business Administration, University of Tartu
Eve Parts: Faculty of Economics and Business Administration, University of Tartu

Baltic Journal of Economics, 2008, vol. 8, issue 1, 29-51

Abstract: Social and institutional determinants of economic development are attracting increasing attention among development economists. The present paper analyses the impact of macro-level social capital and related social factors on economic development in 34 European countries. Macro-level social capital comprises different aspects of institutional quality and is closely related to income distribution and social cohesion. We used principal component analysis to group initially selected social determinants of economic development into three components (human and social capital, income equality, and redistribution), which altogether describe 64.4% of the variation in initial variables. The following regression analysis proved that all these components have a positive effect on economic development, measured by the human development index.

Keywords: Social capital; institutional quality; economic development; European economies (search for similar items in EconPapers)
JEL-codes: A12 O10 O15 Q01 Z13 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:bic:journl:v:8:y:2008:i:1:p:29-51

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