Institutional quality and economic growth: Evidence from developing countries

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Abstract

This research aims to study the role of institutions in promoting employment and economic growth for a sample of eight Balkan countries over the period 2000–2022. Based on the cointegration technique by Pedroni (2004), fully modified ordinary least squares (FMOLS) and the dynamic ordinary least squares (DOLS) method by Kao and Chiang (2001) determined the potential long-run relationship between variables. The results suggest the existence of a positive and significant relationship between institutions and economic growth. We also found that education supported growth, and unemployment has restricted growth. The conclusion is that further improving institutional quality and education is necessary for supporting growth and employment.

Keywords: Institutional Impact, Economic Development, Labor Institutions

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: D02, J50, O11

Received: 22.11.2023
Accepted: 10.06.2024
Published online: 12.06.2024

How to cite this paper: Liko, E. (2024). Institutional quality and economic growth: Evidence from developing countries [Special issue]. Journal of Governance & Regulation, 13(2), 395–402. https://doi.org/10.22495/jgrv13i2siart15