Determinants of institutional quality: an empirical exploration

Abstract

Recent literature has underlined the role that institutions play in the process of development, making it essential to understand why differences exist in the quality of institutions across countries. The goal of this study is to investigate the determinants of institutional quality. Our results confirm that institutional quality is conditioned by variables that can be modulated by public policy, such as income per capita, international openness, education, taxation, and patterns of income (re)distribution. Our conclusions differ from the pessimistic outlooks of works highlighting deterministic factors, such as colonial or geographical factors, as determinants of institutional quality.

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