The Impact of Institutional Environment on Wealth and Economic Development: Cross-Country Comparisons

Abstract

This paper analyses hypotheses about the impact of the quality of the institutional environment for economic development and wealth. Qualitative and quantitative characteristics of that dependence are also considered in this paper. International indices, ratings and ranking of countries according to parameters of quality of the institutional environment are used as indicators of the quality of the institutional environment. Consistency of the different rating grades are considered in this paper and an integrated index of institutional quality are produced. On the basis of this integrated index there were found correlations between institutional settings, level of welfare and economic growth. Results show statistically significant connections between wealth and the quality of the institutional environment. Connection between the institutional environment and economic growth is more complicated. Refs 20. Figs 3. Tables 3.