Institutional Quality and Economic Growth (in Korean)

Young Soo Shin (), Yong-Hwan Noh (), Dongwon Lee () and Weh-Sol Moon
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Young Soo Shin: Department of Economics, Seoul Women's University
Yong-Hwan Noh: Department of Economics, Seoul Women's University
Dongwon Lee: College of Economics, Sungkyunkwan University

Economic Analysis (Quarterly), 2014, vol. 20, issue 3, 75-110

Abstract: This study investigates the link between institutional quality and economic growth. Our theoretical investigation suggests that good institutions can achieve long-run economic growth by making consensus building relatively easy to promote the adoption of good economic policies. The members in such society easily accept the outcome of the economic policies. This, in turn, implies the adoption of a good economic policy that will ensure future economic growth. We employ a pooled data consisting of about 50 countries over a period of 30 years (1981-2010) and the result shows that institutional quality measured by corruption and the rule of law has a significantly positive effect on long-run economic growth. Also, introducing instrument variables to solve an endogeneity problem associated with institutional quality enables us to show that social conflict variables such as high levels of trust and democracy can be conducive to improving institutional quality.

Keywords: Institutional quality; Social Capital; Economic Growth; Social Conflict (search for similar items in EconPapers)
JEL-codes: O10 O43 Z10 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:bok:journl:v:20:y:2014:i:3:p:75-110

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