Institutions Quality and Growth

Fabien Ngendakuriyo ()

No 2009014, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We analyze the dynamic interaction between civil society organizations and Government in a representative developing economy. Government favors corruption and so fails to build efficient institutions. On its side, civil society exerts pressure on Government to constrain it to halt corruption. We distinguish between an authoritarian Government and an unrestrictive one: the latter does not repress society's protests while the former implements punishment mechanisms. We demonstrate analytically the existence of a unique stable equilibrium by solving a linear quadratic differential game for three Regimes respectively the optimal control problem, noncooperative and cooperative games. Numerical assessment indicates that civil monitoring always increases as corruption increases, but civil monitoring is low and institutions improve much faster under cooperation. Furthermore, total factor Productivity effects always dominate the detrimental effect of civil monitoring on growth in the first regime, under some restrictions in the second and never in the third. In response to a change in the government's aversion to rent variations in the presence of authoritarian government, total factor productivity effects always dominate under both the noncooperative and cooperative scenario.

Pages: 28
Date: 2009-06-01
New Economics Papers: this item is included in nep-dev and nep-soc
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Institutional Quality and Growth (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2009014

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