The impact of institutional quality on economic growth: A comparative analysis of the EU and non-EU countries of Southeast Europe
The quality of institutions and its impact on economic growth has become more important in recent years, especially in transition countries that must reform their institutions to create a market economy and meet the preconditions for joining the EU. This is the case with the countries of...
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| Format: | Article |
| Language: | English |
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Faculty of Economics, Belgrade
2020-01-01
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| Series: | Ekonomski Anali |
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| Online Access: | http://www.doiserbia.nb.rs/img/doi/0013-3264/2020/0013-32642025163R.pdf |
| Summary: | The quality of institutions and its impact on economic growth has become more
important in recent years, especially in transition countries that must
reform their institutions to create a market economy and meet the
preconditions for joining the EU. This is the case with the countries of
Southeastern Europe, some of which are already EU members, while others are
in the process of joining the EU. This paper examines the effects of
institutional quality on the economic growth of South- East Europe and
compares these effects in EU and non-EU countries for the period 1996-2017,
using Worldwide Governance Indicators (WGI) to measure the quality of
institutions and the GDP growth rate. The panel autoregressive distributed
lag (ARDL) approach is used to analyse the relationship between
institutional quality and economic growth. The results show that in EU
countries there is a long-run relationship between institutional quality and
economic growth for all significant variables, while in the non-EU countries
only government effectiveness, political stability and absence of violence,
regulatory quality, and voice and accountability are statistically
significant. Furthermore, in EU countries there is no short-run relationship
between institutional quality and economic growth, while in the non-EU
countries of SEE, regulatory quality and voice and accountability are
significant. |
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| ISSN: | 0013-3264 1820-7375 |