Unbundled institutions, human capital and growth

We investigate the partial effects of institutions and human capital on growth. We find that cross-country regressions of the log-level of per capita GDP on instrumented measures of institutions and schooling are uninformative about the relative importance of institutions and human capital in the lo...

Full description

Saved in:
Bibliographic Details
Published in:Journal of Comparative Economics 2009-03, Vol.37 (1), p.106-120
Main Author: Bhattacharyya, Sambit
Format: Article
Language:English
Subjects:
Cross cultural studies
Economic growth
Economics
Education
GDP
Gross Domestic Product
Growth
Human capital
Institutions
Institutions Human capital Growth
Market regulation
Regression analysis
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We investigate the partial effects of institutions and human capital on growth. We find that cross-country regressions of the log-level of per capita GDP on instrumented measures of institutions and schooling are uninformative about the relative importance of institutions and human capital in the long run because of multicollinearity problems. Using dynamic panel regressions we show that both institutions and human capital have significant effects on growth. Using Rodrik's [Rodrik, D., 2005. Growth strategies. Handbook of Economic Growth 1 (1), 967–1014] four-way partition of institutions, we also unbundle institutions. We show that strong market creating institutions and market stabilising institutions are growth enhancing. Market regulating institutions matter up to a certain extent and market legitimising institutions does not seem to matter. Journal of Comparative Economics 37 (1) (2009) 106–120.
ISSN:0147-5967
1095-7227
DOI:10.1016/j.jce.2008.08.001