How do institutions affect economic development and growth in different countries?

Authors

  • Aima Noor PhD Scholar Department of Economics of Newports Institute of Communications and Economics, Karachi
  • Zobia Anwar MS Scholar Department of Economics of Newports Institute of Communications and Economics, Karachi

Abstract

Through the use of six different countries, the United States of America, the United Kingdom, Germany, Turkey, Russia, and China. this study investigates the relationship between the quality of institutions and the level of economic development. Specifically, panel data regression analysis is utilized in this investigation. The analysis makes use of information obtained from the Worldwide Governance Indicators and Global Development Indicators of the World Bank, which cover the period of time from 1996 to 2019. According to the findings, the quality of institutions, which can be evaluated by the regulatory framework of the government, the degree of the rule of law, and the capacity of the government to combat corruption, has a positive influence on economic development in each of the six nations where the study was conducted. It is important to note that the impact of each indicator varies from country to country. According to the findings of the study, economic growth is positively influenced by population growth and investment, whereas trade openness and human capital had a very little impact on the growth of the economy. Taking into consideration the findings, it is recommended that governments make the enhancement of institutional quality a top priority in order to promote economic growth. In addition, strategies that are targeted at increasing the population and increase investment may also prove to be helpful in accomplishing this objective.

Keywords: institutions affect, economic development, growth in different countries

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Published

2024-05-25

How to Cite

Aima Noor, & Zobia Anwar. (2024). How do institutions affect economic development and growth in different countries?. Advance Journal of Econometrics and Finance, 1(4), 61–73. Retrieved from http://ajeaf.com/index.php/Journal/article/view/40