Institutions and US regional development: a study of Massachusetts and Virginia

Kim, Sukkoo

doi:10.1017/s1744137409001295

Cited by 11 publications

(6 citation statements)

References 56 publications

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“…So far, despite the great effort to address the issue of the impact of institutional quality on the growth rate (see, for an updated survey, Valeriani and Peluso ), there are negligible analyses carried out at a regional level, as argued by Charron and Lapuente (). Within this tiny stream of literature we may quote Kim () who conducted a comparative analysis between Massachusetts and Virginia, finding evidence that the difference between these two North American states in terms of political economy and institutional quality may explain the unequal income distribution. Degirmenci (), in an empirical analysis performed on Turkey, demonstrated that although the sub‐national institutions are substantially the same countrywide, their density and quality varies from one area to another, and this has an impact on regional growth and development.…”

Section: Literature Survey and Methodological Issuesmentioning

confidence: 99%

“…The duration of civil disputes is a measure of the time necessary for private enforcement of the law (Silbey and Sarat ; Djankov et al ; Kim ), and is a good indicator of institutional quality because, as recently affirmed by the World Bank, ‘justice delayed is justice denied’ (World Bank ).…”

Section: The Institutional Framework and Its Implications For Theory mentioning

confidence: 99%

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Institutional quality and the growth rates of the Italian regions: The costs of regulatory complexity

Vita

2018

Papers in Regional Science

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In this paper we study the impact of regulatory complexity, a measure of institutional quality, on the GDP, on per capita income and on the growth rate of the Italian regions. For comparative reasons we also use the duration of civil disputes as a further indicator of institutional quality used in the regressions as an alternative to the indicator of regulatory complexity. From the theoretical point of view, we use the approach of negative co‐ordination externalities, among the four sources of regulatory production that are at work at the same time. Our approach may be applied in all the countries with a multi‐level government system. Using the random effects and quantile regressions models we are able to quantify the effects of an improvement in institutional quality on the GDP and the growth rate, making a comparison between the results obtained using regulatory complexity or the duration of civil disputes as covariates. We also check for spatial dependence among variables. Econometric analysis supports the theoretical assumption that regulatory complexity is an impediment to the growth of regional GDP and per capita income. The main finding of our analysis is that a reduction in regulatory complexity would be more effective than a reduction in the duration of civil disputes in increasing the income and growth rate. This result could be useful for the policy‐maker because by reducing regulatory complexity we may obtain a considerable by‐product in the shorter duration of civil disputes.

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Section: Literature Survey and Methodological Issuesmentioning

confidence: 99%

Section: The Institutional Framework and Its Implications For Theory mentioning

confidence: 99%

Institutional quality and the growth rates of the Italian regions: The costs of regulatory complexity

Vita

2018

Papers in Regional Science

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“…This weakens the main mechanism of the model as uncertainty about the distribution of the costs of uprisings falls. Moreover there were important institutional differences between the south, with oligarchic institutions, and the north, with more democratic institutions (Kim, 2009).…”

Section: The Americas After Independencementioning

confidence: 99%

The risk of civil conflicts as a determinant of political institutions

Aguirre¹

2016

European Journal of Political Economy

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This paper proposes a specific mechanism to explain differences in political institutions based on the asymmetric and uncertain costs of civil conflicts. Asymmetry implies that the net benefit of fighting an insurgency is not shared equally by members of the elite. But uncertainty implies that these benefits are more evenly distributed ex-ante. The members of the elite face a commitment problem: they would like to commit in advance to a strong response to insurgencies, but ex-post they have the incentives to block any response if the conflict mainly affects other members of the elite. One way of solving this is empowering the executive so he may react forcefully to conflicts, despite the opposition of some fraction of the elite. In the model this group has to decide on the constraints imposed on the executive. Fewer constraints lead to a higher risk of expropriation. But more constraints lead to a suboptimal response to conflicts. The main prediction is that, conditional on asymmetric and uncertain costs, the higher is the likelihood of a civil conflict in the future, the lower are the constraints imposed on the executive. The paper empirically validates this implication using two types of evidence. First, it uses a sample of former colonies that became independent after WWII and geographic variables to identify the exogenous component of the likelihood of civil conflicts at the moment of the independence. Second, the model is used to explain the political events in the Americas after independence. Countries less prone to internal conflicts were the ones that imposed more constraints on the executive during the second half of the nineteenth century. Resumen Este trabajo propone un mecanismo específico para explicar diferencias en instituciones políticas basado en la asimetría e incertidumbre que poseen los costos de ciertos conflictos civiles. La asimetría implica que el beneficio neto de pelear contra una insurgencia nos es compartido de forma similar entre los miembros de la clase gobernante o elite. Pero la incertidumbre implica que estos beneficios están mejor distribuidos con anterioridad a que se produzca un conflicto. Debido a esto a los miembros de la elite les gustaría comprometerse a una respuesta fuerte a cualquier insurgencia en el futuro, pero luego que ésta ocurre tienen el incentivo a bloquear una respuesta fuerte si ellos no son afectados de forma importante. Una manera de solucionar este problema es empoderando al ejecutivo para que éste pueda reaccionar de manera más fuerte ante un eventual conflicto, no obstante la oposición de una fracción de la elite. En el modelo este grupo debe decidir en las restricciones que se imponen al ejecutivo. Menores restricciones llevan a un riesgo de expropiación mayor, pero mayores restricciones llevan a una respuesta débil a conflictos civiles. La principal predicción del modelo es que, condicionando en costos asimétricos e inciertos, mientras mayor es la probabilidad de un conflicto civil en el futuro, menores son las restricciones impuestas al ejecutivo. El t...

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“…Institutional factors also could lead to increase in income inequality as Holcombe and Boudreaux (2016) concluded in their study on market institutions. Kim (2017) assigned divergence in legal and political institutions in explaining differences in the level of economic development in Virginia and Massachusetts in the USA.…”

Section: Literature Reviewmentioning

confidence: 99%

Regional financial disparity in India: can it be measured?

Arora

Anand

2021

Journal of Institutional Economics

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In this study, we examine disparities in financial development at the regional level in India. The major research questions of the study are: how do we measure the level of financial development at the sub-national level? How unequal is financial development across the states? Does it vary by ownership of financial institutions? To explore these research questions, our study develops a composite banking development index at the sub-national level for three different bank groups – public, private and foreign for 25 Indian states covering 1996–2015. Our findings suggest that despite reforms, banking development is significantly higher in the leading high income and more developed regions compared to lagging ones. Furthermore, we find that all bank groups including public banks are concentrated more in the developed regions. Overall, over the years the position of top three and bottom three states in the aggregate banking index have remained unchanged reflecting lop-sidedness of regional development. We also note improvement in the ranking of some north-eastern states during the period 2009–15.

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Institutions and US regional development: a study of Massachusetts and Virginia

Cited by 11 publications

References 56 publications

Institutional quality and the growth rates of the Italian regions: The costs of regulatory complexity

Institutional quality and the growth rates of the Italian regions: The costs of regulatory complexity

The risk of civil conflicts as a determinant of political institutions

Regional financial disparity in India: can it be measured?

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