Institutional Profiles : Analysis of Original Data on the Institutional Characteristics of Developing, in Transition and Developed Countries

Since the beginning of the 1990s, the question of institutions has been propelled to the top of the economic agenda. If the empirical literature has well documented the general relationship between institutions and development, attention is now being concentrated on the actual nature of the institutional mechanisms at work, the inter-relationships between them and their combined impact on development. Whereas previous analysis of development had mainly drawn on the instruments derived from national accounts, there is not yet an internationally standardized set of institutional indicators. We first propose to contribute to the filling of this gap, putting forward an original database covering a broad and detailed field of institutional characteristics for 51 countries (developing, in transition and developed countries). Second, we identify an 'institutional core' consisting of four major institutional characteristics (governance, security of transactions, innovation and regulations) and present a typology of four institutional profiles: 'authoritarian-paternalistic', 'mild liberal', 'pure liberal' and 'informal'. This typology is then supplemented by a combination of both institutional and economic variables, highlighting two main dimensions: welfare and reform. We finally confirm and precise the causal relationship between institutions and economic development