Obedience and income levels

Kaitlyn Harger and Joshua Hall

Applied Economics Letters, 2015, vol. 22, issue 2, 94-98

Abstract: We revisit the relationship between informal institutions and income levels. The empirical literature on institutions finds that indices of 'informal institutions' such as trust, respect, respect, self-determination and obedience are more important than 'formal institutions' such as constitutional constraints in explaining income levels across countries. We add to this literature in two ways. First, we separate out the index of informal institutions into its component parts to see which informal institutions are primary. Second, we construct two new measures of obedience to test the robustness of obedience. Our reduced-form results indicate the primacy of obedience over other informal institutions.

Date: 2015
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Working Paper: Obedience and Income Levels (2014)
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DOI: 10.1080/13504851.2014.927563

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