EVALUATION OF INTER-COUNTRY INSTITUTIONAL QUALITY DIFFERENCES IN TERMS OF DEVELOPMENT IN COREPERIPHERY RELATIONS

Abstract

Institutional economics approach reveals that institutions are essential in increasing social welfare by
 comprehensively addressing social and economic life. At the same time, institutional economics approach
 proceeds similarly to the problems discussed in the development literature. This study evaluates the
 developmental differences between countries in core, semi-periphery and periphery countries according to
 institutional quality differences. In the first part of the analysis, the core (upper and lower), semi-periphery
 (upper, middle and lower) and periphery (upper, middle, and lower) country groups were determined by
 the club convergence method using the data between 1990 and 2017. The second part of the analysis tests
 the institutional approach that explains the development differences between countries for eight country
 groups. Findings have revealed the effect of economic freedom on development in all subgroups of core,
 semi-periphery, and peripheral countries. In addition, while the effect of democracy on development has
 an increasing effect in core and semi-periphery country groups, the results in peripheral countries are
 found statistically insignificant.