Economics at your fingertips  

Role of Political Institutions on Economic Growth: Empirical Evidence

Walid Alali

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores the effect of political institutions on economic development via its causation of economic reforms. Focusing on the causality between political institutions – democracy, specifically – and economic reforms. After all, one way of improving society's well-being is through promoting economic growth, thereby narrowing the cross-country income differences. We investigate whether economic reforms are more likely to take place in democracies since greater accountability may lead the government to adopt measures that gain majority support. Economic reforms are referred to as comprehensive measures that broaden the market's scope including the international. Using the same methodology as in the previous paper1, the dynamic panel GMM estimator, we study whether democracy causes economic reforms in different sectors, namely fiscal measures, trade liberalisation, credit market liberalisation, capital account openness and labour market deregulation. Reciprocally, test if economic reforms cause the democratisation process, and how political institutions and economic reforms interact.

Keywords: Economic Development; Institutions; Institutions Performance; Policy; Economic Growth; Political Institution (search for similar items in EconPapers)
JEL-codes: D02 E02 O1 O4 (search for similar items in EconPapers)
Date: 2010-12-01
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

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:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2023-11-11
Handle: RePEc:pra:mprapa:115611