Unbundled Institutions, Human Capital and Growth

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: We investigate the partial effects of institutions and human capital on growth. We find that cross-country regressions of the log-level of per capita GDP on instrumented measures of institutions and schooling are uninformative about the relative importance of institutions and human capital in the long run because of multicollinearity problems. Using dynamic panel regressions we show that both institutions and human capital have significant effects on growth. Using Rodrik's (2005) four-way partition of institutions, we also unbundle institutions. We show that strong market creating institutions and market stabilising institutions are growth enhancing. Market regulating institutions matter up to a certain extent and market legitimising institutions does not seem to matter.

Keywords: Institutions; Human Capital; Growth (search for similar items in EconPapers)
JEL-codes: O11 O30 O43 O57 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2008
New Economics Papers: this item is included in nep-dev, nep-hap, nep-hrm and nep-lab
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Citations: View citations in EconPapers (7)

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Journal Article: Unbundled institutions, human capital and growth (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2008-14

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