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3 - Regulation, Institutions and Economic Growth in Advanced, Emerging and Developing Countries

from Part I - Economic Growth and Structural Reforms in Europe

Published online by Cambridge University Press:  31 March 2020

By
Balázs Égert
Edited by
Nauro F. Campos ,
Paul De Grauwe  and
Yuemei Ji
Nauro F. Campos
Affiliation:
University College London
Paul De Grauwe
Affiliation:
London School of Economics and Political Science
Yuemei Ji
Affiliation:
University College London
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Summary

This chapter uses the OECD’s newly assembled Structural Policy Indicators Database for Economic Research (SPIDER) to gauge on the impact of regulation and institutions on economic growth. We investigate for a sample of around 100 countries and for a set of OECD countries the extent to which product and labour market regulations and policies influence per capita income levels. Our estimation results indicate that more business-friendly product market regulations are associated with higher per capita income levels. At the same time, it is more difficult to identify precisely estimated effects of labour market regulation and policies, perhaps with the exception of spending on ALMP, which tend to have a positive relation to per capita income. We also find that the quality of institutions influences a country’s level of development and that institutions interact with product market regulations. Finally, our results also show that labour market regulation and policies may attenuate or accentuate the impact of product market regulations on per capita income levels.

Keywords

economic growthregulationinstitutionsOECDdeveloping countriesemerging markets
Type
Chapter
Information
Economic Growth and Structural Reforms in Europe , pp. 63 - 108
Publisher: Cambridge University Press
Print publication year: 2020

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