Institutional Transformations, Polity and Economic Outcomes: Testing the North-Wallis-Weingast Doorsteps Framework

Marc Quintyn and Sophia Gollwitzer

No 2012/087, IMF Working Papers from International Monetary Fund

Abstract: This paper tests the theoretical framework developed by North, Wallis and Weingast (2009) on the transition from closed to open access societies. They posit that societies need to go through three doorsteps: (i) the establishment of rule of law among elites; (ii) the adoption of perpetually existing organizations; and (iii) the political control of the military. We identify indicators reflecting these doorsteps and graphically test the correlation between them and a set of political and economic variables. Finally, through Identification through Heteroskedasticity we test these relationships econometrically. The paper broadly confirms the logic behind the doorsteps as necessary steps in the transition to open access societies. The doorsteps influence economic and political processes, as well as each other, with varying intensity. We also identify income inequality as a potentially important force leading to social change.

Keywords: WP; open access order; government expenditure; political system; Gini coefficient; NWW transition framework; institutions; economic performance; political performance; transition; income inequality; open access society; Income inequality; Personal income; Corruption; Europe; Asia and Pacific (search for similar items in EconPapers)
Pages: 58
Date: 2012-03-01
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Citations: View citations in EconPapers (5)

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