2013
DOI: 10.1007/s11127-013-0143-1
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Institutional interactions and economic growth: the joint effects of property rights, veto players and democratic capital

Abstract: We investigate the possible interaction effects that the extent of property rights protection and separation of powers in a political system have on economic growth. Using analysis of panel data from more than countries over the period 1970-2010 we find that the growth effects of property rights increase when political power is divided among more veto players. When distinguishing between institutional veto players (political institutions) and partisan veto players (fractionalization among political parties), w… Show more

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Cited by 26 publications
(18 citation statements)
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“…Yet, in accordance with the work of Wagner [23] and Kurrild-klit Gaard and Berggren [24], it is obvious that one institutional category 9 remains insufficient to create an institutional structure that can stimulate economic growth. However, it is advisable to mention that the effect of interaction between two institutional variables depends on the political experience of a country [25]. Therefore, when analyzing the impact of institutional interaction on economic performance, several scenarios in accordance with the works of authors who have analyzed the interaction Theoretical Economics Letters between property rights and political power.…”
Section: Institutional Interaction On Economic Performancementioning
confidence: 99%
See 1 more Smart Citation
“…Yet, in accordance with the work of Wagner [23] and Kurrild-klit Gaard and Berggren [24], it is obvious that one institutional category 9 remains insufficient to create an institutional structure that can stimulate economic growth. However, it is advisable to mention that the effect of interaction between two institutional variables depends on the political experience of a country [25]. Therefore, when analyzing the impact of institutional interaction on economic performance, several scenarios in accordance with the works of authors who have analyzed the interaction Theoretical Economics Letters between property rights and political power.…”
Section: Institutional Interaction On Economic Performancementioning
confidence: 99%
“…instpolitik insteco * is introduced to capture the combined effect of political and economic institutions on economic performance in the sense that we are in an environment where the variables interact, consequently such an effect is more important than the independent effect of each type of institution [25].…”
Section: Assessment Of the Effects Of Institution On Economic Performmentioning
confidence: 99%
“…At the same time, the higher constraints on the democrat's executive power, as well as the potential threat of losing power in future elections, prevents him/her from engaging in the kind of predation that one may observe with an autocrat with kleptocratic tendencies (or if the leader in a democracy does engage in predatory policies that lead to a fall in income, there is a high chance that the leader will lose power in a future election) (Geddes 1999;Quinn and Woolley 2001;Burke and Leigh 2010;Justesen and Kurrild-Klitgaard 2013). In contrast, in autocracies, leaders with short-term time horizons and a high discount rate may be willing to engage in predation, with the expectation that the autocrat is not likely to be in place for too long.…”
Section: Relationship Between Political Regimes and The Episode mentioning
confidence: 99%
“…Individual property rights allow individuals to plan ahead both in their own investment decisions; and in relation to contractual dealings with individuals that might be unknown (North, 1989;Justesen, 2013). North (1989) argues the successful economic development of England and British North America as compared to Spain and Iberian South America, was in part because of the successful establishment of institutions that facilitated exchange; and that the state was constrained from being an undermining influence.…”
Section: Individual Property Rights In Development Theorymentioning
confidence: 99%