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The Determinants of Institutional Quality. More on the Debate

Alonso, José Antonio and Garcimartín, Carlos (2009) The Determinants of Institutional Quality. More on the Debate. [Working Paper or Technical Report]

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Abstract

This paper provides new evidences about the determinants of institutional quality. Prior to implementing
our empirical research, we discuss the criteria that should be used to judge the quality of
institutions. Then, we identify the factors that, according to these criteria, determine institutional
quality. The results obtained in the estimated model enable to draw some interesting conclusions.
First of all, development level determines institutional quality: the highest the former, the highest
the latter. Secondly, income distribution seems to condition institutional quality. A certain degree
of social cohesion is needed to provide institutional predictability and legitimacy. Thirdly, a sound
tax system is positively asso-ciated with institutional quality improvement. Taxes provide the necessary
revenue to ge-nerate quality institutions, while creating a narrower and more demanding
relation between State and citizens. Finally, education improves institutional quality. On the contrary,
some of the variables identified in the literature either they do not seem to determine institutional
quality or their effects are indirect, through the aforementioned variables.

Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Institutional quality, Income distribution, Taxes, Education.
Subjects:Social sciences > Economics > World economy
Social sciences > Economics > Economic development
Series Name:Working Papers
Volume:UNSPECIFIED
Number:WP03/0
ID Code:9665
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Deposited On:30 Nov 2009 08:35
Last Modified:06 Feb 2014 08:29

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