Do Weak Institutions Prolong Crises? On the Identification, Characteristics, and Duration of Declines during Economic Slumps

Richard Bluhm, Denis de Crombrugghe and Adam Szirmai

No 4594, CESifo Working Paper Series from CESifo

Abstract: This paper defines economic slumps as sequences of structural breaks exhibiting a specific pattern. We identify 58 such episodes between 1950 and 2008 among 138 countries, and then examine the phases of decline and their duration. In some countries declines last extremely long, and we put several likely contributing factors to the test. We find evidence that weak institutions precede crises and, interestingly, positive reforms occur thereafter. Strong institutions shorten the duration of crises, ethnic cleavages do the reverse. However, the negative effects of ethnic cleavages are not insurmountable: an interaction effect suggests they can be offset by appropriate institutions.

Keywords: economic slumps; crises; institutions; structural breaks; duration analysis (search for similar items in EconPapers)
JEL-codes: C41 F43 O11 O43 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Do Weak Institutions Prolong Crises ? On the Identification, Characteristics, and Duration of Declines During Economic Slumps (2020)
Working Paper: Do weak institutions prolong crises?: On the identification, characteristics, and duration of declines during economic slumps (2013)
Journal Article: Do Weak Institutions Prolong Crises? On the Identification, Characteristics, and Duration of Declines during Economic Slumps
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4594

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