Institutional interactions and economic growth: The joint effects of property rights, veto players and democratic capital

Justesen, Mogens K. and Kurrild-Klitgaard, Peter (2013): Institutional interactions and economic growth: The joint effects of property rights, veto players and democratic capital. Forthcoming in: Public Choice (2013)

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), we further find that the growth effects of property rights are driven mainly by checks on the chief executive (in bicameral systems) and primarily found in countries with large stocks of democratic capital.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic growth; institutions; property rights; veto players; democracy.
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; P - Economic Systems > P1 - Capitalist Systems > P14 - Property Rights; P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy; P - Economic Systems > P1 - Capitalist Systems > P17 - Performance and Prospects; P - Economic Systems > P4 - Other Economic Systems > P48 - Political Economy ; Legal Institutions ; Property Rights ; Natural Resources ; Energy ; Environment ; Regional Studies

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