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Island Status, Country Size and Institutional Quality in Former Colonies

Rapport
Författare Heather Congdon Fors
Förlag Göteborg University
Förlagsort Göteborg
Publiceringsår 2007
Publicerad vid Institutionen för nationalekonomi med statistik
Språk en
Länkar hdl.handle.net/2077/4589
Ämnesord islands, political institutions, economic institutions,rule of law, development, JEL: N40, O10
Ämneskategorier Nationalekonomi

Sammanfattning

The purpose of this paper is to explore the effects of island status and country size on institutional quality, and to determine if these institutional effects can explain the relatively strong economic performance of islands and small countries. One of the main findings of this paper is that the relationship between island status and institutional quality is significantly positive, and that these results are robust to the inclusion of a number of control variables. Further, we find that country size is negatively related to institutional quality, which is in keeping with previous results. Finally, using an instrumental variable method we demonstrate that when Rule of Law is included in regressions on levels of per capita GDP, the positive effects of small country size and island status disappear. These results provide further support for our hypothesis that institutions account for these countries’ relatively better economic performance.

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