Institutionelle Unsicherheit und wirtschaftliche Entwicklung / Institutional Uncertainty and Economic Development

Klump Rainer and Reichel Richard
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Klump Rainer: Universität Würzburg, Volkswirtschaftliches Institut, Sanderring 2, D-97070 Würzburg
Reichel Richard: Universität Erlangen-Nürnberg, Lange Gasse 20, D-90403 Nürnberg

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 1994, vol. 213, issue 4, 441-455

Abstract: We conjecture that interventions into existing property rights may make the future course of economic policy unpredictable. Interventionism thus creates a climate of “institutional uncertainty” which works as a brake upon capital formation, innovation and growth. Using a stochastic intertemporal optimization framework we show that an increased level of uncertainty exercises a negative effect on the level of economic development and the rate of technical progress. Finally, we conduct a cross-section analysis of the long-term growth performance of Sub-Saharan African countries. We find support to our hypothesis that differences in economic development can be related to different degrees of institutional uncertainty.

Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:213:y:1994:i:4:p:441-455

DOI: 10.1515/jbnst-1994-0405

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