This article examines economic development from 1996 to 2015 for 192 countries and specifically Latin America. Evidence shows that each 0.1-point increase in institutions impacts a 3.9% improvement in Latin American per capita output versus a 2.6% effect on world development. This new evidence from Latin America shows a missing opportunity to develop at higher annual pace than the 2.14% average, mainly due to the deterioration in rule of law. We conjecture the efficiency of monetary/fiscal policies will improve if policymakers emphasize projects that foster improvements to institutional quality, such as transparency, public spending quality and fiscal responsibility.
Vianna, Andre C., and Andre V. Mollick. “Institutions: Key Variable for Economic Development in Latin America.” Journal of Economics and Business 96 (March 1, 2018): 42–58. https://doi.org/10.1016/j.jeconbus.2017.12.002.
Journal of Economics and Business
Original published version available at https://doi.org/10.1016/j.jeconbus.2017.12.002