Instituições e nível de renda: uma abordagem empírica para os municípios paranaenses

The Paraná State municipalities show a great of disparity in the level of development. The GDP per worker difference between the most and the least developed cities in the beginning of this millennium was superior to 700%, according to IBGE (2000) database. Therefore, studies to detect the sources of these huge income disparities among municipalities of Paraná State are of great relevance. A possible explanation for these disparities is provided by institutional theory. Many empirical studies based on this theory have found a high correlation between institutional quality and the level of economic development. This theory suggests that the institutions affect the level of economic development through its effects on the political power distribution, on the generation of economic opportunities, on innovation and human capital accumulation, and so on. Considering the above mentioned theory, the present study objective is to analyze the effects of institutional quality of Paraná State municipalities on their levels of economic development.