Tebaldi, Edinaldo and Mohan, Ramesh (2008): Poverty, Geography and Institutional Path Dependence.
Download (428kB) | Preview
Using seven alternative measures of the institutions, this study examines the impacts of the quality of institutions on poverty rates in developing countries. The estimates obtained using the instrumental variable method (2SLS) show that the quality of institutions is negatively related with poverty rates and explain a significant portion of the variation in poverty rates across countries. More precisely, the empirical results suggest that an economy with a robust system to control corruption, market-friendly policies, a working judiciary system, and in which people have freedom to exercise their citizenship will create the necessary conditions to promote economic development and reduce poverty. The results suggest that pro-poor policies aimed at reducing poverty should first consider improving the quality of institutions in developing countries as a pre-requisite for economic development and poverty eradication.
|Item Type:||MPRA Paper|
|Original Title:||Poverty, Geography and Institutional Path Dependence|
|Keywords:||Poverty Trap, Institutions, Development|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I32 - Measurement and Analysis of Poverty
|Depositing User:||Edinaldo Tebaldi|
|Date Deposited:||27. Aug 2008 17:03|
|Last Modified:||12. Feb 2013 11:14|
Acemoglu, D., Johnson, S. and Robinson, J. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review, Vol. 91 (5), pp. 1369-1401.
Acemoglu, D., Johnson, S. and Robinson, J. 2005. “The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth,” American Economic Review, Vol. 95(3), pp. 546-579.
Alcala, F. and Ciccone, A. 2004. “Trade and Productivity”, Quarterly Journal of Economics, 119 (2), 613-46
Barro, R. and Sala-I-Martin, X. 1995. Economic Growth. The MIT Press.
Bastiaensen, J., De Herdt, T. and D’exelle, B. 2005. “Poverty Reduction as a Local Institutional Process,” World Development Vol. 33 (6), pp. 979–993
Beck, T., Clarke, G., Groff, A., Keefer, P. and Walsh, P. 2000. “New Tools and New Tests in Comparative Political Economy: The Database of Political Institutions,” World Bank Policy Research Working Paper No. 2283.
Breton, T.R. 2004. “Can Institutions or Education Explain World Poverty? An Augmented Solow Model Provides Some Insights.” Journal of Socio-Economics Vol. 33 pp. 45–69.
Chong, A. and Calderón, C 2000a. “On the Causality and Feedback Between Institutional Measures and Economic Growth.” Economics and Politics, Vol.12 (1) pp.69-81.
Chong, A. and Calderón, C. 2000b. “Institutional Quality and Poverty Measures in a Cross-section of Countries,” Economics of Governance, Vol. 1 (2), pp. 123-135.
Davidson, R. and MacKinnon, J.G. 1993. Estimation and Inference in Econometrics. Oxford University Press, New York
Denoon, D. 1983. Settler Capitalism: The Dynamics of Dependent Development in the Southern Hemisphere. Oxford, UK: Clarendon Press.
Dollar, D. and Kraay, A. 2002. “Growth is Good for the Poor,” Journal of Economic Growth, Vol. 7(3), pp. 195-225
Durham, J.B. 2004. “Economic Growth and Institutions: Some Sensitivity Analyses, 1961–2000,” International Organization, Vol. 58 pp. 485-529.
Easterly, W. and Ross, R. 2003. “Tropics, Germs, and Crops: How Endowments Influence Economic Development,” Journal of Monetary Economics, Vol. 50 (1), pp. 3-39.
Enders, W and Hoover, G.A. 2003. "The Effect of Robust Growth on Poverty: a Nonlinear Analysis," Applied Economics, Vol. 35(9), pp. 1063-1071.
Engerman, S. L. and Sokoloff, K.L. 2003. “Institutions and Non-Institutional Explanations of Economic Differences.” NBER Working Paper 9989.
Glaeser, E.L., La Porta, R., Lopez-de-Silane, F. and Shleifer, A. 2004. “Do Institutions Cause Growth?” NBER Working Papers 10568.
Grindle, M.S. (2004). “Good Enough Governance: Poverty Reduction and Reform in Developing Countries.” Governance Vol.17 (4), pp. 525–548.
Hall, R.E. and Jones, C.I. 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others? The Quarterly Journal of Economics, Vol. 114 (1) pp. 83-116
Henisz, W. (2000). “The Institutional Environment for Economic Growth,” Economics and Politics, Vol.12 (1), pp. 1-31.
Kakwani, N and Pernia, E. 2000. “What is Pro-poor Growth,” Asian Development Review, Vol.16 (1) pp. 1–22.
Kaufmann, D., Kraay, A., and Mastruzzi, M. 2007. “Governance Matters VI: Governance Indicators for 1996-2006,” World Bank Policy Research Working Paper No. 4280.
Klasen, S. 2008. “Economic Growth and Poverty Reduction: Measurement Issues using Income and Non-Income Indicators.” World Development, Vol. 36 (3) pp. 420-445.
Knack, Stephen and Philip Keefer 1995. “Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Measures,” Economics and Politics, Vol.7, pp. 207-27.
LaPorta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. 1999. “The Quality of Government,” Journa. of Law, Economics and Organization, Vol. 15(1) pp. 222-279
Lopez, H. 2004. “Pro-poor-Pro-growth: Is there a Trade Off?” The World Bank, Policy Research Working Paper No. 3378.
McArthur, J.W. and Sachs, J.D. 2001. “Institutions and Geography: Comment on Acemoglu, Johnson, and Robinson (2000)”, NBER Working Paper, 8114.
McGill, R. 1995. “Institutional Development a Review of the Concept.” International Journal of Public Sector Management, Vol. 8(2) pp. 63-79.
Mitchell, B. R. 2003a. International Historical Statistics: Africa, Asia & Oceania, 1750-2001. New York: Palgrave Macmillan, fourth Edition, p.1144.
Mitchell, B. R. 2003b. International Historical Statistics Europe 1754-2000: Europe, 1750-2000. New York: Palgrave Macmillan, fifth Edition, p. 960.
Mitchell, B. R. 2003c. International Historical Statistics: The Americas 1750-2000. New York: Palgrave Macmillan, fifth Edition, p. 856.
North, D.C. 1990. “Institutions, Institutional Change and Economic Performance.” New York, Cambridge University Press, 1990.
North, D.C. 1993. “The New Institutional Economics and Development.” Economic History 9309002, EconWPA
Ravallion, M. and Chen, S. 2003. “Measuring Pro-poor Growth.” Economics Letters Vol.78, pp. 93–99.
Rodrik, D. 2000. “Institutions for High-Quality Growth: What they are and How to Acquire Them.” Studies in Comparative International Development (SCID), Vol. 35 ( 3), pp. 3-31.
Rodrik, D., Subramanian, A., and Trebbi, F. 2004. “Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Vol. 9 (2), pp. 131-165.
Rosenberg, N. 1963. “Mandeville and Laissez-Faire,” Journal of the History of Ideas, 24 (2): 183-196.
Sachs, J. D. 2003. “Institutions Don’t Rule: Direct Effects of Geography on Per Capita Income.” NBER Working Paper No. 9490.
Sen, A. K. 1981. Poverty and Famines. An Essay on Entitlement and Deprivation, Oxford University Press, Oxford.
Sindzingre, A. 2005. “Explaining Threshold Effects of Globalization on Poverty An Institutional Perspective, UNU-WIDER Research Paper No. 2005/53 Helsinki, Finland.
Tebaldi, E. and Elmslie, B. 2008. Do Institutions Impact Innovation? MPRA Working paper No. 8757, available at: http://mpra.ub.uni-muenchen.de/8757/.
Tebaldi, E. and Mohan, R. 2008. Institutions Augmented Solow Model with Poverty Trap, Manuscript