Apparent Influence Of The Institutions Quality On Economic Growth In The World

Abstract

The authors test the hypothesis of interdependence between the quality of economic and political institutions and the economic growth in 2010-2018s. To measure the quality of economic institutions, the authors used the average for the nine years position of countries in the "Ease of Doing Business Index", and the average nine-year position of the country in the "Democracy Index" to measure the quality of political institutions. The economic growth rate is calculated as a nine-year average based on the World Bank data. On the basis of correlation analysis, it is proved that in the period after the global economic crisis of 2008-2009, the highest growth rates were shown by countries that occupy relatively low positions in both ratings. The leading countries in their positions in the "Democracy Index" and "Ease of Doing Business Index" occupy quite low positions in terms of the economic growth. This can be explained by the low base effect of a number of leading countries in terms of the economic growth and efficient economic policies carried out by the elites of these states. The Russian case demonstrates a direct correlation between a low position in the "Democracy Index" and a low position in the growth rates, an inverse correlation between a relatively good position in the "Ease of Doing Business Index" and a low position in the economic growth rates. The paradox of the Russian case can be explained both by significant negative effects of the global economic crisis, anti-Russian sanctions, and ineffective economic policy.