The Causal Relationship between Institutions and Economic Growth: An Empirical Investigation for Pakistan Economy

Danish Siddiqui and Masood Qazi ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates relationship between institutional quality and economic performance in Pakistan using the Johansen-Juselius cointegration technique and the Granger causality test. The study results indicate that Institutions and growth are cointegrated and thus exhibit a reliable long run relationship. The Granger causality test findings indicate that the causality between Institutions and growth is uni-directional. However, there is no short run causality from Institutions to growth and vice versa. Therefore, as a policy implication that institutional quality may cause to the sustainable increase in country’s income in the long run, and success of any policy could be influenced by the soundness of institutions.

Keywords: institutions; social capital; growth; cointegration; index; granger; error correction; Johansen; pakistan (search for similar items in EconPapers)
JEL-codes: O43 P48 Z1 Z13 (search for similar items in EconPapers)
Date: 2009-12-28
New Economics Papers: this item is included in nep-cwa and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Causal Relationship Between Institutions and Economic Growth: An Empirical Investigation for Pakistan Economy (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19745

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