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Institutions: Key variable for economic development in Latin America

Andre Vianna and Andre V. Mollick

Journal of Economics and Business, 2018, vol. 96, issue C, 42-58

Abstract: This article examines economic development from 1996 to 2015 for 192 countries and specifically Latin America. Evidence shows that each 0.1-point increase in institutions impacts a 3.9% improvement in Latin American per capita output versus a 2.6% effect on world development. This new evidence from Latin America shows a missing opportunity to develop at higher annual pace than the 2.14% average, mainly due to the deterioration in rule of law. We conjecture the efficiency of monetary/fiscal policies will improve if policymakers emphasize projects that foster improvements to institutional quality, such as transparency, public spending quality and fiscal responsibility.

Keywords: Economic development; Institutions; Latin America; Panel data (search for similar items in EconPapers)
JEL-codes: O47 O43 N16 (search for similar items in EconPapers)
Date: 2018
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