Democracy, Economic Freedoms and Economic Growth: An Investigation on the Role of Institutions

Emrah Koçak and Nisfet Uzay (uzay@erciyes.edu.tr)

Sosyoekonomi Journal, 2018, issue 26(36)

Abstract: The main purpose of this paper is to investigate the impact of the institutional quality on economic growth in high, medium and low-income countries in the period of 1995-2013. In this study, institutional quality is represented as a component of democracy and economic freedoms. The institutional quality index for each country is calculated by the principal component analysis (PCA) method using democracy and economic freedoms indicators. Then, the relationship between the institutional quality index and economic growth is estimated by panel data analysis method (panel unit root, panel cointegration, panel causality analysis). The estimation results for all groups of countries are as follows: (i) the panel cointegration test confirms a long-run equilibrium relationship between institution quality and economic growth. (ii) According to this relationship, institutional quality has a positive effect on economic growth. (iii) The panel causality tests support a bidirectional causality between institution quality and economic growth. The results of the analysis indicate that institutions are a significant influence on economic growth.Classification-JEL:E02, O43, C01. Keywords:Democracy, Economic Freedoms, Institutions, Economic Growth, Panel Data, Principal Component Analysis

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dergipark.gov.tr/download/article-file/456785

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sos:sosjrn:180205

Access Statistics for this article

More articles in Sosyoekonomi Journal from Sosyoekonomi Society Cihan St. 27/7 06430 Sihhiye Ankara Turkey.
Bibliographic data for series maintained by Aysen Sivrikaya (aysens@hacettepe.edu.tr).