Do Institutions Cause Growth?

Edward Ludwig Glaeser (), Rafael La Porta (), Florencio Lopez-de-Silane and Andrei Shleifer
Authors registered in the RePEc Author Service: Florencio Lopez-de-Silanes ()

No 10568, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We revisit the debate over whether political institutions cause economic growth, or whether, alternatively, growth and human capital accumulation lead to institutional improvement. We find that most indicators of institutional quality used to establish the proposition that institutions cause growth are constructed to be conceptually unsuitable for that purpose. We also find that some of the instrumental variable techniques used in the literature are flawed. Basic OLS results, as well as a variety of additional evidence, suggest that a) human capital is a more basic source of growth than are the institutions, b) poor countries get out of poverty through good policies, often pursued by dictators, and c) subsequently improve their political institutions.

JEL-codes: O11 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-lam, nep-mfd and nep-reg
Date: Written
Note: EFG
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Journal Article: Do Institutions Cause Growth? (2004)
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