Protection of Property Rights and Growth as Political Equilibria

Asoni, Andrea

doi:10.2139/ssrn.1107509

Cited by 18 publications

(20 citation statements)

References 88 publications

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“…Successive literature reviews by Armey (1995), Abdiweli (2003) and Asoni (2008) have confirmed the consensus that institutions matter for growth. In addition to the importance of well‐defined property rights, Abdiweli empirically confirmed that judicial efficiency, low levels of corruption and a well‐organized public bureaucracy also co‐vary positively with high levels of growth.…”

Section: Theoretical Considerationsmentioning

confidence: 88%

Government Size and Growth: A Survey and Interpretation of the Evidence

Bergh

Henrekson

2011

Journal of Economic Surveys

164

112

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: The literature on the relationship between the size of government and economic growth is full of seemingly contradictory findings. This conflict is largely explained by variations in definitions and the countries studied. An alternative approach -of limiting the focus to studies of the relationship in rich countries, measuring government size as total taxes or total expenditure relative to GDP and relying on panel data estimations with variation over time -reveals a more consistent picture: The most recent studies find a significant negative correlation: An increase in government size by 10 percentage points is associated with a 0.5 to 1 percent lower annual growth rate. We discuss efforts to make sense of this correlation, and note several pitfalls involved in giving it a causal interpretation. Against this background, we discuss two explanations of why several countries with high taxes seem able to enjoy above average growth: One hypothesis is that countries with higher social trust levels are able to develop larger government sectors without harming the economy. Another explanation is that countries with large governments compensate for high taxes and spending by implementing market-friendly policies in other areas. Both explanations are supported by ongoing research. Terms of use: Documents inJEL Classification: E62; H11; H20; O23; O43.

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Section: Theoretical Considerationsmentioning

confidence: 88%

Government Size and Growth: A Survey and Interpretation of the Evidence

Bergh

Henrekson

2011

Journal of Economic Surveys

164

112

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“…To dig deeper, there are specific types of institutions under these headings which also could be expected to have a greater influence on financial markets. As the sine qua non of economic institutions, property rights have been proven empirically to be a foundation for transition dynamics (Hartwell 2013), economic growth (Torstensson 1994, Acemoglu and Johnson 2005, Asoni 2008, and many others), and, most importantly for our purposes, the development of an effective financial sector (Clague et al 1999, Andrianaivo andYartey 2009).…”

Section: Stock Markets and Institutionsmentioning

confidence: 99%

The impact of institutional volatility on financial volatility in transition economies

Hartwell

2018

Journal of Comparative Economics

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What have been the determinants of financial volatility in the transition countries of Central and Eastern Europe and the former Soviet Union? This paper posits that institutional changes, and in particular the volatility of crucial institutions such as property rights, have been the major causes of financial volatility in transition. Building a unique monthly database of 20 transition economies from 1991-2017, this paper applies the GARCH family of models to examine financial volatility as a function of institutional volatility. The results show that more advanced institutions help to dampen financial sector volatility, while institutional volatility feeds through directly to financial sector volatility in transition. Democratic changes in particular engender much higher levels of volatility, while property rights are sensitive to the metric used for their measurement.

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“…According to North (1992), good institutions facilitate low transaction costs which in turn galvanize economic growth. In the context of formal institutions, property rights hold a principal position among all economic institutions which is in line with extensive research on its impact on economic growth (see for instance, Acemoglu et al, 2001;Asoni, 2008;Besley and Ghatak, 2009;Kerekes and Williamson, 2008). The rule of law's impact on economic growth can be summarised in three areas as described by Haggard et al (2008).…”

Section: Institutions and Economic Growth: Theoretical Considerationsmentioning

confidence: 67%

Economic growth and quality of institutions in 27 postsocialist economies

Alexiou

Vogiazas²,

Solovev

2020

JES

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PurposeThe relationship between institutional quality and economic growth is revisited.Design/methodology/approachA panel cointegration methodology and causality analysis are applied to 27 postsocialist economies over the period from 1996 to 2016.FindingsUtilizing the Worldwide Governance Indicators as a means of assessing the quality of institutions, it is found that in the long run, economic growth is positively associated with the rule of law and voice and accountability. In the short run, regulatory quality retains a positive effect, but voice and accountability demonstrate a puzzling negative effect on economic growth that merits further analysis. In exploring the causal dimension of our variables, supporting evidence of the strong links between the quality of institutions and economic growth is provided, hence rendering robust results.Originality/valueTo the best of the authors’ knowledge, it is the first time that an ARDL methodological framework, which addresses potential endogeneity issues, is used to investigate the relationship between institutional quality and growth in the context of postsocialist economies.

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Protection of Property Rights and Growth as Political Equilibria

Cited by 18 publications

References 88 publications

Government Size and Growth: A Survey and Interpretation of the Evidence

Government Size and Growth: A Survey and Interpretation of the Evidence

The impact of institutional volatility on financial volatility in transition economies

Economic growth and quality of institutions in 27 postsocialist economies

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