The Impact of Institutional Factors on Economic Growth in Western Balkan Countries

Arta Krasniqi Markaj () and Shenaj Haxhimustafa ()
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Arta Krasniqi Markaj: South East European University
Shenaj Haxhimustafa: South East European University

A chapter in Emerging Dynamics in Business and Economics, 2025, pp 73-84 from Springer

Abstract: Abstract This paper aims to explore how institutional factors impact economic growth in Western Balkan countries from 2008 to 2022. Using various statistical techniques including OLS, fixed and random effects, and the Hausman–Taylor model IVs, the study identifies key factors such as the rule of law, control of corruption, trade, regulatory quality, government effectiveness, and age dependency, which significantly influence the economy in this region. Variables like voice and accountability and political stability show insignificant effects on economic growth. These findings suggest that different institutional configurations are needed to drive long-term economic development in Western Balkan countries. The research examines into the combined impact of institutional quality on economic progress across the region, examining different aspects of institutional governance and their potential consequences for economic performance. The paper advocates for policy interventions aimed at strengthening institutional frameworks to support sustainable economic development in the Western Balkan countries.

Keywords: Economic growth; Development; Institutional factors; Panel data; Western Balkan countries (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-91686-1_4

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DOI: 10.1007/978-3-031-91686-1_4

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