Freedom, Ratings and Economic Growth: In Search of Reliable Dependencies

Konstantin Yanovsky and Rinat Menyashev
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Konstantin Yanovsky: Gaidar Institute for Economic Policy
Rinat Menyashev: National Research University – Higher School of Economics
Authors registered in the RePEc Author Service: Konstantin Moshe Yanovskiy

Working Papers from Gaidar Institute for Economic Policy

Abstract: Ratings evaluating the quality of institutions are widely known; they are generally used in academic and research literature. Among such ratings are some whose compilation procedure took decades to perfect. Dozens of assessments have been accumulated, pertaining to a large and growing list of countries. All these ratings use expert evaluations with country ranking. We suppose that such evaluations are essentially incompatible with each other, and therefore inapplicable in a comparative study at some one specific point in time chosen for observation (i.e., for a cross-section analysis). We propose a group of variables of our own, using evaluations of “political” institutions only to ascertain the presence or absence of a certain phenomenon (yes/no). Such a set of variables makes a cross-section analysis feasible. The countries' experience in Rule of Law Democracy and Limited Government (both are quite clearly defined in a formal manner) provides a long-term institutional development aggregate evaluation for cross-section analysis. We also propose a thoroughly simple rating based on combining the proposed variables with indices and indicators which have already become widely accepted, but taking this combination as part of a data panel. At the same time, using a panel regression makes it possible to mitigate the problem of poor compatibility of expert evaluations.

Keywords: Rule of Law Democracy; Limited Government; Institutions quality indicators; Institutions and Economic growth (search for similar items in EconPapers)
JEL-codes: N40 O43 P50 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013, Revised 2013
New Economics Papers: this item is included in nep-dev and nep-pol
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https://www.iep.ru/files/RePEc/gai/wpaper/0063Yanovsky.pdf Revised version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:gai:wpaper:0063

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