Regional institutions, political volatility and their impact on productivity: a Latin American perspective

Mario Seffino () and Germán González ()
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Mario Seffino: Universidad Nacional del Centro de la Provincia de Buenos Aires (UNCPBA)
Germán González: Instituto de Investigaciones Económicas y Sociales del Sur (GEID-IIESS, UNS-CONICET)

International Economics and Economic Policy, 2025, vol. 22, issue 2, No 9, 22 pages

Abstract: Abstract Studies on economic integration in Latin America indicate that countries within the region encounter significant challenges in sustaining long-term growth and exhibit a marked lack of convergence with developed economies. A critical factor in this context is the quality of institutions, particularly the stability of governmental policies. This study examines the convergence of total factor productivity across 16 Latin American countries from 1980 to 2019, evaluating the impact of public policy volatility, particularly in relation to regional integration agreements. We employ econometric panel data models with corrected standard errors to ensure a robust analysis. The results indicate that high volatility is associated with greater divergence in productivity, underscoring the importance of political stability and institutional quality in promoting more balanced economic development in the region.

Keywords: Institutional Quality; Total Factor Productivity; Convergence; Volatility; Public Policies; Latin America; F15; O47; O57; O11 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10368-025-00663-x

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