Institutions and economic performance

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Evidence from Cross-Country study

This book presents a study on the impacts of institutions on economic performance.

The issue about the relationship between institutions (in the broader sense) and economic performance, mitigation of violent conflict, sustainable peace and poverty reduction is now very important when a sizable population of the world is still under mass poverty, war, displacement and destruction.

This book employs secondary data from many trusted sources and has analyzed panel data for 35 years and 110 countries.

A fixed effects model and OLS estimation were used for the analysis of the data.

The finding shows that all institutional variable like law and order, constraint on executive power, and enforcing property rights consistently show positive impact on investment, which is taken as a measure of economic performance.

Distance from the equator also shows positive impact.

Civil war and land-lockedness have negative impact.

The implication is that developing countries should fundamentally improve their political, economic and social institutions in order to reduce poverty and maintain peace in their countries.

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