This paper compares more direct measures of the institutional environment with both the instability proxies used by Barro (1991) and the Gastil indices, by comparing their effects both on growth and private investment. The results provide substantial support for the position that the...

Douglass North (1990) describes institutions as the rules of the game that set limits on human behavior, now a universally-accepted definition. North and others especially underline the crucial role of informal social norms. They predict that, like all rules of the game, social norms should...

We reconstruct a dataset used by Persson and Tabellini (AER, 1994) to test the robustness of their finding that inequality reduces income growth, but only in democracies. We find that their result is highly sensitive to the use of data sources on both democracy and inequality. When we substitute...

This paper makes two contributions to the literature. First, it introduces a new, easily accessed and objective measure of the enforceability of contracts and the security of property rights. Second, it uses this measure to provide additional and more direct evidence about the importance of...

We present and test empirically a new theory of property and contract rights. Any incentive an autocrat has to respect such rights comes from his interest in future tax collections and national income and increases with his planning horizon. We find a compelling empirical relationship between...

The literature argues that the presence of multiple veto players (government decisionmakers) with polarized interests increases the credibility of sovereign commitments, but reduces the ability of governments to adjust policies in the event of exogenous shocks that jeopardize their ability to...

Early neoclassical analyses predicted that poor countries would grow faster than wealthy countries because of technological advances and diminishing returns to capital in the latter. The reverse has occurred: poor countries are falling back rather than catching up. The authors suggest here that...

This paper presents evidence that 'social capital' matters for measurable economic performance, using indicators of trust and civic norms from the World Values Survey for a sample of twenty-nine market economies. Membership in formal groups--Putnam's measure of social capital--is not associated...