Indicators Of Institutional Quality Research Articles

Effects of Corruption, Government Effectiveness and Political stability on Economic Growth: Evidence from Morocco

This study examines the impact of Corruption, government effectiveness and political stability on economic growth in Morocco. We conduct an empirical analysis to quantify the impact of institutional quality on economic growth over the period 1996 – 2021 by employing Two Stage Least Squares (2SLS). The findings reveal that corruption has a significant negative influence on economic growth, highlighting the importance of anti-corruption measures. On the other hand, political stability emerges as a key driver of economic growth, emphasizing the need for stable political environments to attract investments and foster entrepreneurship. Additionally, the growth of the public spending negatively affects GDP per capita, stressing the significance of prudent fiscal policies and effective public sector management. This research emphasizes the critical role of institutions, political stability, and efficient governance in driving economic growth. Policymakers can leverage these insights to enhance these institutional quality indicators and foster sustainable and inclusive economic development.

Volume-Outcome Relationships for Intra-Aortic Balloon Pump in Acute Myocardial Infarction.

Acute myocardial infarction (AMI) is a major scenario for the use of an intra-aortic balloon pump (IABP), particularly when complicated by cardiogenic shock, although the utilization of mechanical circulatory support devices varies widely per hospital. We evaluated the relationship, at the hospital level, between the volume of IABP use and mortality in AMI.Methods and Results: Using a Japanese nationwide administrative database, 26,490 patients with AMI undergoing primary percutaneous coronary intervention (PCI) from 154 hospitals were included in this study. The primary endpoint was the observed-to-predicted in-hospital mortality ratio. Predicted mortality per patient was calculated using baseline variables and averaged for each hospital. The associations among PCI volume for AMI, observed and predicted in-hospital mortality, and observed and predicted IABP use were assessed per hospital. Of 26,490 patients, 2,959 (11.2%) were treated with IABP and 1,283 (4.8%) died during hospitalization. The annualized number of uses of IABP per hospital in AMI was 4.5. In lower-volume primary PCI centers, IABP was more likely to be underused than expected, and the observed-to-predicted in-hospital mortality ratio was higher than in higher-volume centers. A lower annual number of IABP use was associated with an increased mortality risk at the hospital level, suggesting that IABP use can be an institutional quality indicator in the setting of AMI.

Tax revenue mobilization and institutional quality in sub‐Saharan Africa: An empirical investigation

AbstractThis paper investigates the effects of institutional quality on tax revenue collection in sub‐Saharan African countries. We include the six institutional quality indicators (i.e., voice and accountability, political stability, regulatory quality, rule of law, control of corruption, and government effectiveness) as explanatory factors for tax revenues and its components in a sample of 42 countries over the period 1996–2019. A system GMM approach was used for the estimations. Consistent with previous results, we find that institutional quality has positive and significant effects on tax revenue collection in sub‐Saharan Africa. Specifically, aggregate total tax revenues, direct taxes, income taxes, and goods and services taxes are positively affected by the six institutional quality indicators. Indirect taxes are positively associated with four indicators, with the exception of government effectiveness and political stability, while tax on international trade are affected by institutional quality factors, with the exception of control of corruption and voice and accountability. These findings indicate that sub‐Saharan African countries should improve institutional quality to boost tax revenue collection.

Institutional quality and emigration nexus: Empirical evidence from Türkiye

AbstractThis study attempts to fill an important gap in the empirical literature by investigating the impact of institutional quality in destination countries on emigrants from Türkiye using bilateral migration data from 2010 through 2020. For this purpose, the study builds an augmented gravity model, including economic, geographic, and cultural variables in an exponential form and estimates it by the Poisson Pseudo Maximum Likelihood (PPML) method. Empirical results significantly confirm the pulling role of strong institutions in destination countries for emigrants from Türkiye since all institutional quality indicators are positively associated with emigrant movements, albeit just one of them, regulatory quality, is statistically insignificant. Among indicators of institutional quality, the most pulling ones for emigrants are voice and accountability and the rule of law, followed by government effectiveness, control of corruption, and political stability and absence of violence, respectively. Overall results indicate that institutions are front‐line players in the emigrants' migration decision and destination choice process. In this context, policy‐makers in both Türkiye and the destination country may implement an institutional policy considering the outcomes stemming from migration movements.

EU Countries Tax Evasion Clustering

The problem of tax evasion is becoming more and more prominent, and it is causing large losses in individual state budgets. However, European policies have taken significant steps to eliminate them over the last two decades. National policies also contribute to reducing the estimated extent of tax evasion, as measured by Schneider's MIMIC model. However, these tendencies are not the same in individual countries. Therefore, in our paper, we try to find pattern in tax evasion time trajectories of European Union countries and thus to create homogenous clusters that include countries with similar tax evasion situation. To meet our goal, we use panel data clustering method on our data with information about tax evasion of EU countries from 2000 to 2019. As a next step, we compare created cluster from the perspective of quality indicators of public institutions.

On the government revenue on economic growth of Sub-Saharan Africa: Does institutional quality matter?

As studies report inconclusive results, the linkage between government revenue and economic growth remains a topic of debate in economic literature. This study investigates the effect of government revenue on the economic growth of Sub-Saharan African countries with the main objective of whether institutional quality matters. The panel data for 43 SSA countries were obtained from dependable data sources: World Development Indicator and Heritage Economic Freedom Index for the period of 2012–2022. The result from system GMM estimation reveals that government revenue adversely affects economic growth while institutional quality positively enhances economic growth before interacting with each other. However, the interactive coefficient of government revenue and economic growth positively affected the real GDP growth rate of SSA countries over the study periods. Precisely, before interacting with institutional quality, a percentage change in government revenue, keeping all other things constant, leads to a 0.0866% decline in economic growth while it marks a 0.2329% upsurge in economic growth in the presence of institutional quality. The result of the study further revealed that government revenue promotes the economic growth of the region when combined with institutional quality. On the other hand, foreign direct investment and openness to trade were the key sources of economic growth whereas the population growth rate adversely impacted economic growth in SSA countries during the study period under consideration. The policy implication of the study is that SSA needs to strengthen government revenue management. Further, the finding of the study implies that SSA countries need to improve institutional quality through promoting efficiency of the regulatory quality and the size of the SSA governments. In addition to this, the fast real GDP growth rate of SSA countries demands improved institutional quality indicators such as the rule of law and extended access to the open market.

Investigating the Nexus between Stock Market and Institutional Quality in Emerging Markets and Developing Countries: A Panel Data Analysis

Purpose: This study empirically explores the impact of institutional quality on the stock market in Emerging Markets and Developing Countries (EM&DC), study utilizes individual institutional quality indicators as well as aggregated in the form of an institutional quality index and checks their impact on the stock market.
 Methodology: The study employs a sample of 43 Emerging Markets and Developing Countries for the time duration from 1996 to 2022. By applying the Generalized method of moments (GMM) and Principal Component Analysis (PCA).
 Findings: The result shows that Institutional quality is not good in these countries and plays a detrimental role in association with the stock market. Mostly individual indicators of institutional quality have a negative and significant impact on the stock market except voice and accountability have a positive and significant impact on the stock market. We also construct an Institutional quality index by applying Principal component analysis (PCA), which also has a negative impact on the stock market.
 Implications: The findings underscore the importance of institutional factors in shaping the financial development of nations. Through our analysis, it becomes evident that emerging markets and developing countries (EM&DCs) should prioritize enhancing their institutional frameworks, as these play a pivotal role in influencing financial development.

Volume-outcome relationships for extracorporeal membrane oxygenation in acute myocardial infarction.

Acute myocardial infarction (MI) is one of the major scenarios of extracorporeal membrane oxygenation (ECMO) use. The utilization of mechanical circulatory support systems including ECMO varies widely at the hospital level, while whether ECMO volume per hospital is associated with outcomes in acute MI is unclear. Using a Japanese nationwide administrative database, a total of 26,913 patients with acute MI undergoing percutaneous coronary intervention from 154 hospitals were included. The relations among PCI volume for acute MI, observed and predicted in-hospital mortality, and observed and predicted rates of ECMO use were evaluated at the hospital level. Of 26,913 patients, 423 (1.6%) were treated with ECMO, and 1561 (5.8%) died during the hospitalization. Median ECMO use per hospital per year was 0.5. An observed rate of ECMO use was linearly correlated with the predicted probability of ECMO use and was not associated with the observed/predicted in-hospital mortality ratio. The observed/predicted mortality ratio was lowest in hospitals with the observed/predicted ECMO use ratio of around one. In conclusion, ECMO was infrequently used in a setting of acute MI at each hospital annually. An observed rate of ECMO use was not associated with observed/predicted in-hospital mortality ratio, while the observed/predicted in-hospital mortality ratio was lowest when ECMO was used as predicted, suggesting that standardized ECMO use may be an institutional quality indicator in acute MI.

External Debt Determinants: Do Macroeconomic and Institutional Ones Matter for Selected ASEAN Developing Countries?

Developing nations have the task of effectively managing their external debt. The government is urged to comprehend the decisive component in managing its external debt, despite the varying viewpoints among economists. In addition, the world sees the need for institutional quality to optimize its economic policy. Institutional quality shows accountability, stability, effectiveness, quality, law, and trust. Our research examines the determinant factors of external debt and discusses the policy to manage external debt. We regress the inflation rate, exchange rate, interest rate, trade openness, and institutional quality on external debt. This study also uses moderated regression analysis to examine the interaction between institutional quality and macroeconomic indicators on external debt. We selected 52 samples from five ASEAN developing countries from 2008 to 2019. The first study found that the inflation rate, interest rate, and institutional quality have a negative impact on external debt, while the exchange rate and trade openness have a positive impact on external debt. Next, we were surprised that institutional quality could not moderate the relationship between the inflation rate, exchange rate, and interest rate on external debt. Further, it only moderated the relationship between trade openness and external debt. In the end, we discuss the external debt determinants from the selected ASEAN developing countries with the theories.

Effect of renewable energy on economic growth in sub‐Saharan Africa: Role of institutional quality

AbstractThe development of renewable energy is considered as an important step toward sustainable development. In sub‐Saharan African (SSA) countries, institutional quality can play an essential role in encouraging investment and implementation of policies favoring renewable energy. This paper examines the role of institutional quality in the effect of renewable energy on economic growth across 25 SSA countries from 2002 to 2018. The results from the dynamic panel threshold model reveal a significant threshold effect of institutional quality on the contribution of renewable energy to economic growth. While renewable energy consumption positively contributes to economic growth, its impact is notably amplified when the institutional quality index, set at 0.304, is above the threshold. Our findings remain robust when altering institutional quality indicators. In terms of economic implications, improving overall institutional quality by promoting good political, economic, and institutional governance could significantly increase the contribution of renewable energies to economic growth in SSA countries.

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Following the approval of sustainable development goals at the global level, the link between fiscal policy, institutional quality, and economic growth has attracted special attention in economic literature. This study scrutinizes the effect of government revenue-institutional quality interaction on the economic growth of 43 Sub-Saharan Africa countries for the period of 2012-2022. Methodology-wise, the study employed the System Generalized Method of Moment (SGMM) to analyze the panel data gained from dependable data sources; the World Development Indicator and the Heritage Economic Freedom Index. The novelty of this study emanates from the estimation technique designated and the introduction of revenue-institutional quality into the economic growth model of SSA. The result of the study reveals that government revenue adversely affects economic growth while institutional quality positively enhances economic growth before interacting with each other. However, the interactive coefficient of government revenue and economic growth positively affected the real GDP growth rate of SSA countries over the study periods. Precisely, before interacting with institutional quality, a percentage change in government revenue, keeping all other things constant, leads to a 0.0866 percent decline in economic growth while it marks a 0.2329 percent upsurge in economic growth in the presence of institutional quality. The result of the study further shows that government revenue promotes the economic growth of the region when combined with institutional quality. On the other hand, foreign direct investment and openness to trade were the key sources of economic growth whereas the population growth rate adversely impacted economic growth in SSA countries. The policy implication of the study is that SSA needs to strengthen government revenue management. Further, the finding of the study implies that SSA countries need to improve institutional quality through promoting efficiency of the regulatory quality and the size of the SSA governments. In addition to this, the fast real GDP growth rate of SSA countries demands improved institutional quality indicators such as the rule of law and extended access to the open market.

Financial inclusion, institutional quality, and economic growth in MENA countries: some evidence from panel cointegration

ABSTRACT The purpose of this paper is to examine financial inclusion indicators with some institutional quality indicators to better understand their combined effect on economic growth in the context of MENA region using panel cointegration tests. The study covers a sample of 16 countries during the 1997–2018 period. The main findings show a positive connection between economic growth and institutional quality in the long run. Moreover, institutional quality negatively affects financial inclusion while no effect of financial inclusion on economic growth was found. These results show that the most of MENA countries have not reached the level of institutional quality, beyond which the financial inclusion can act as a growth factor.

Short- and long-run relationship between financial development and economic competitiveness in WAEMU: does institutional quality matter?

PurposeThis paper aims to assess the short- and long-run effects of the interaction between institutional quality and financial development (FD) on the competitiveness of the WAEMU economy over the period 2007–2018.Design/methodology/approachThe methodology consisted of cross-referencing a synthetic indicator of FD with indicators of institutional quality and then estimating an auto regressive distributed lag model.FindingsThe results of the pooled mean group and dynamic fixed effect estimation show a positive and significant impact of this interaction on the competitiveness of the economy in the long run. In the short run, the results are quite similar to those in the long run for the direct effects but different for the crosses. Also, the analysis of country specificity shows that the results are similar to those in the short run since the interaction between FD and institutional quality (political stability and government effectiveness) negatively affects the competitiveness of Burkina Faso, Ivory Coast and Mali, and positively affects the competitiveness of Benin and Senegal.Social implicationsThese results suggest the need for effective policies to improve the quality of institutions to enhance the mobilization of financial resources through FD to ensure the competitiveness of economies. Improving the quality of the political and institutional environment is a prerequisite for economic competitiveness.Originality/valueThe paper is in line with the New Institutional Economics that developed in the 1970s. This referential framework is a heterogeneous body of work that encompasses works whose common point is the determination of the role of institutions in economic coordination. Unlike previous studies, which have focused on the contribution of the interaction between institutional quality variables and FD on economic growth, this paper analyzes the effects of this interaction on economic competitiveness. It, therefore, constitutes a contribution to this literature and aims primarily to fill this gap.

The role of institutional quality in the relationship between financial development and economic growth: Emerging markets and middle-income economies

In this study, the relationship between economic growth and financial development was analyzed for emerging markets and middle-income economies. The effect of financial development on growth, whether there is institutional quality or not, has also been investigated. In addition, which financial development indicator is more effective for growth has been examined. Six institutional quality indicators and seven financial development indicators were used. According to the Dumitrescu–Hurlin causality test results, there is a causality relationship between all financial development indicators and growth. According to the estimation results, financial development indicators have a positive effect on growth in the presence of institutional quality. However, if institutionalization is not included in the model, the effect of financial development indicators on economic growth is statistically insignificant.

The interrelationship between corruption and the shadow economy: a perspective on FDI and institutional quality

PurposeThis study explores the relationship between corruption and shadow economy (SE) by examining the potential links and interactions between these two phenomena to see whether it is a one-way or two-way relationship and a complementarity or substitution linkage.Design/methodology/approachUsing a dataset comprised of 145 countries all over the world between 1996 and 2015, the authors apply the simultaneous two-step system generalized method of moments approach to address the research question.FindingsThe study findings support a positive bidirectional relationship between corruption and SE. As such, this study has provided evidence supporting the complementarity association. In the authors' further analyses, they point out that several factors can moderate this positive bidirectional linkage. In particular, while Foreign Direct Investment (FDI) inflows strengthen it, it is weakened by other institutional factors such as civil liberties and political rights. Finally, by splitting the full sample into three different subsamples and then examining countries at varying stages of economic development, the authors can gain valuable insights into the evolving dynamics of the relationship between corruption and SE. Specifically, while the authors observe that the positive direction of corruption to SE remains unchanged across different nations, they observe that the positive influence of SE on corruption is strongest among developed economies only.Practical implicationsThe study findings provide an important policy implication. This study highlights the synergistic relationship between SE and corruption, indicating that reducing corruption will reduce the size of the SE. Consequently, this reduction in the SE can mitigate the adverse effects of corruption on economic development.Originality/valueThis paper is among the first empirical studies that critically investigate the interrelationship between SE and corruption. It then explores how this two-way linkage is conditional on some factors, such as economic development levels and institutional quality indicators.

Extending the frontiers of financial development for sustainability of the MENA states: The roles of resource abundance and institutional quality

AbstractResource abundance characterizes economies within the MENA region from North Africa to the Middle East. As such, to improve financial development (FD) for regional economic sustainability, this study provides a comprehensive analysis of the roles of natural resources abundance and institutional quality indicators on the region's FD while underscoring the inflationary levels and general economic growth trends amidst rising globalization. The adopted empirical strategy (CS‐ARDL and AMG) is employed for potential cross‐sectional dependency (CD) and slope homogeneity in the regional data spanning over two decades (2000–2020). Unlike the extant literature, two separate regional FD indicators were considered for an insightful analysis namely, banking financial services via domestic credit to private sector, and financial stability via the Z‐score values showing the tendencies of default in a country's banking structure. Regardless of the FD indicator, the results reveal that natural resources, growth trends, and inflationary levels significantly spur long‐run regional FD thereby invalidating the financial resource curse hypothesis in the region. Furthermore, both institutional quality levels and globalization produced detrimental impacts on FD levels. However, the interaction between institutional quality levels and natural resources shows a desirable FD‐stimulating effect in the region, noticeably when FD is proxied by the Z‐score. Thus, implying that stronger institutions are crucial for MENA's overall financial stability vis‐à‐vis reduction in the risk of default in the banking system. Hence, policy recommendations including the strengthening of institutional capacities among others, were suggested to regional authorities toward harnessing resources for sustainable regional FD.

Do institutions impact differently inward greenfield FDI and cross-border M&A sales? A study of five institutional quality indicators in developed and developing countries

PurposeThis study aims to test the impact of different institutional quality indicators on two modes of foreign direct investment (FDI)-greenfield investment and cross-border mergers and acquisitions (M&As) for a sample of 110 countries over the period 2003–2017.Design/methodology/approachThe authors develop a model of well-known FDI determinants, such as market size and potential, openness, the value of the national currency and the quality of institutions. The authors examine one-by-one five different institutional factors: law and order, investment profile of the host country, control of corruption (anti-corruption); democratic accountability, and government stability, applying a generalized method of moments (GMM) estimator that assures no endogeneity and reverse causality of the key explanatory variables.FindingsThe results point out the fact that fertile institutional conditions for attracting greenfield FDI to developing countries require law and order, good investment conditions and a state of democracy, but not necessarily tight control of corruption and a stable government. On the other hand, the appropriate institutional environment for attracting cross-border M&A sales flows to developing countries includes strong law and order, good investment conditions, strict control of corruption and strong democratic accountability. The results for developed countries show overall smaller importance of institutions as a determinant of both types of FDI.Originality/valueThis is the first study to analyze the differentiated determinants of the two modes of investment. The study holds implications for crafting two different policies for attracting greenfield FDI and M&A sales.

Examination of the poverty-environmental degradation nexus in Sub-Saharan Africa

The relationship between environmental degradation and poverty has increasingly become the focus of national strategic decision-making in recent years. However, despite several theoretical explorations on the nexus, a dearth of empirical literature on the poverty-environmental degradation nexus, specifically on Sub-Saharan Africa (SSA), still exists. In this study, we investigated the poverty-environmental degradation nexus in SSA. We hypothesized that poverty is both a cause and effect of environmental degradation, and this relationship is explained as a vicious cycle. Unlike previous studies, we employed several alternative indicators of environmental degradation to examine the poverty-environmental degradation nexus in this study. We used data from 41 countries of SSA between 1996 and 2019 and employed the generalized method of moments (GMM) approach. The findings suggest a cyclical relationship between poverty and environmental degradation in SSA, which confirms that an increase in poverty leads to an increase in environmental degradation, especially in deforestation and PM2.5 emissions. Similarly, the increase in environmental degradation positively affects poverty in SSA. We also confirmed that exogenous conditioning factors such as population growth rate, education, industrialization, and income inequality, institutional quality indicators such as governance effectiveness, control of corruption, freedom ad civil liberty, and democracy, and endogenous factors including fossil fuel energy use, fuelwood energy use, household health expenditure, infant mortality rate, and agriculture productivity influence the nexus between poverty and environmental degradation. The findings on the relationship between poverty and environmental degradation in SSA are a testimonial evidence that both poverty and environmental degradation are significant issues in SSA. Hence, poverty alleviation policies in SSA should not lead to PM2.5 emissions and deforestation, which may as well force people into a poverty-environmental degradation trap. Instead, poverty reduction policies should simultaneously achieve environmental conservation.

Analysis of Non-Oil Exports – Economic Growth Relationship in Nigeria: The Role of Institutional Qualities

ABSTRACT: One of the primary policy issues over the years in the context of the Nigerian economy has been how to enhance the performance of the non-oil export sector of the economy in order to diversify the country's export base and contribute more to GDP (gross domestic product). Rather than a lack of policy initiatives, the noticeably abysmal performance of Nigerian non-oil exports has been increasingly attributed to poor policy implementation. However, the question of whether such poor implementation is due to the quality of institutional settings, particularly in a developing economy such as Nigeria, has been largely unexplored. To the best of our knowledge, none of the previous studies deemed it necessary to control for the role of institutional quality in the non-oil export-growth nexus from the perspective of the Nigerian economy. To bridge this important gap in the literature, we hypothesize that institutional qualities matter in the relationship between economic growth and non-oil exports. Motivated by a desire to diversify Nigeria's economy away from its reliance on oil exports, this study re-examines the export-led growth hypothesis from the standpoint of non-oil exports while accounting for the role of institutional qualities. We employ the ARDL estimation technique as the best econometric model for the study given its suitability for variables of mixed order of integration in terms of the series' stationarity. More so, the ARDL technique enables us to simultaneously capture both the short-run and long-run dynamics of the nexus. Empirically, we show results that suggest that improved institutional qualities have the potential to boost the positive effects of non-oil exports on economic growth. We also find that the extent to which institutional quality matters for enhancing the effects of non-oil exports on economic growth depends on the institutional quality indicators chosen. On the whole, we expand on the export-led growth hypothesis by considering the role of institutional characteristics and conclude that improving institutional qualities should be prioritized in the path to Nigerian economic diversification.

Role of institutional quality in debt-growth relationship in Pakistan: An econometric inquiry

This study attempts to investigate the mediating role of institutional quality on the relationship between public debt and economic growth in Pakistan spanning 1996–2020. Time series data on all six World Bank World Governance indicators of institutional quality is used in the empirical analysis. Findings of the autoregressive distributed lag (ARDL) bounds testing technique and error correction method (ECM) confirmed the existence of cointegration among variables of interest. The short-run results indicate that public debt has a favorable association with economic growth, while the relationship is found to be detrimental in the long run. Furthermore, the combined effect of public debt and institutional quality indicators revealed the significant positive association with economic growth, suggesting that better institutional quality can contribute to mitigate the negative impact of public debt on economic growth in Pakistan.