Economic systems in developing countries – A macro cluster approach

Markus Ahlborn and Rainer Schweickert

Economic Systems, 2019, vol. 43, issue 3

Abstract: This study is an attempt to close a gap in the comparative capitalism literature. Studies in that field focus mostly on industrialized countries, discuss economic systems in developing regions separately, and do not provide evidence based on a worldwide sample. We use an established macroeconomic cluster approach to identify economic systems in a worldwide sample of 115 developing and industrialized countries. We use an innovative approach to correct for income-related differences that would otherwise distort the cluster results. The major results are (1) that two broad categories of economic systems exist in developing countries (liberal and coordinated), which mirrors the results for industrialized countries, and (2) that economic systems in developing countries are apparently determined by a mixture of colonial heritage—with the transfer of more liberal institutions in the case of British colonialization—and regional affiliation, which explain differences within continents and between continents.

Keywords: Cluster analysis; Developing countries; Economic systems; OECD; Principal components analysis; Varieties of capitalism; Worlds of welfare states (search for similar items in EconPapers)
JEL-codes: H10 P10 P51 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Economic systems in developing countries: A macro cluster approach (2017)
Working Paper: Economic systems in developing countries: A macro cluster approach (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:43:y:2019:i:3:s0939362519300159

DOI: 10.1016/j.ecosys.2019.100692

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