The Impact of Variations in Institutional Grafting Modes on Economic Growth: A Three-Dimensional Approach

Tamilina, Larysa and Tamilina, Natalya (2015): The Impact of Variations in Institutional Grafting Modes on Economic Growth: A Three-Dimensional Approach. Forthcoming in:

Abstract

This article explains the peculiarities of institutional effects on growth rates in post-communist countries. By proposing a certain dependence of the institution-growth nexus on the mode of institutional grafting, the distinction between drift-phase and path-breaking institutional change is introduced. Theoretical juxtapositions show that transition countries’ institutions built through path-breaking institutional reforms differ from those that emerge evolutionarily in the drift phase in a twofold manner in their relationship to growth. Growth rates of their economies are less likely to depend on the quality of legal institutions and are more likely to be a function of the maturity of political institutions. In addition, legal institutional change in the post-communist world is a product of the quality of the political environment to a greater extent than their drift-phase alternatives. These propositions are tested empirically based on a sample of 87 countries derived from the POLITY IV Project's website.

• Item Type: MPRA Paper
• Language: English
• Keywords: institutional economics, formal institutions, institutional change, post-communist transition
• Subjects: K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements

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