Institutions and economic performance: What can be explained?

Arbeitspapier

Institutions are now widely believed to be important in explaining performance. In this paper, we analyze whether commonly used measures of institutions have any significant, measurable impact on performance, whether of countries or firms. We look at three 'levels' of institutions and associated conjectures. The first concerns whether the political system affects performance. The second concerns whether the business and investment environment affects the performance of countries and the third concerns whether perceived business constraints directly affect the performance of firms. In all instances, we find little evidence of a robust link between widely used measures of institutions and our indicators of performance. We consider why this might be the case and argue that mis-measurement, misspecification, complexity and non-linearity are all relevant factors.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 5247

Classification and Topics

• Classification: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Business Objectives of the Firm ; Microeconomic Analyses of Economic Development ; Other Economic Systems: Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
• Subject: institutions ; growth ; Institutionalismus ; Institutionelle Infrastruktur ; Wirtschaftswachstum ; Unternehmensentwicklung ; Wirkungsanalyse ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Commander, Simon ; Nikoloski, Zlatko
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/46125
• Last update: 10.03.2025, 11:43 AM CET