Quality of institutions and standard of living: a panel cointegration analysis

Roberto Antonietti and Chiara Burlina

Economics Bulletin, 2021, vol. 41, issue 3, 2074-2079

Abstract: Does the quality of its institutions affect the average standard of living in a country? We aim to answer this question by conducting a panel cointegration analysis on a sample of 162 countries and 21 years, from 1996 to 2016. In the long run, the estimates show a mutual (Granger) causal effect between all six constitutive elements of institutional quality considered and GDP per capita, our proxy of a country's standard of living. In the short run, however, GDP per capita is only influenced by voice and accountability, and regulatory quality.

Keywords: quality of institutions; standard of living; panel cointegration; Granger causality (search for similar items in EconPapers)
JEL-codes: O1 O4 (search for similar items in EconPapers)
Date: 2021-09-18
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