Differences in institutional quality explain why some countries are wealthier than others
the verdict
SUPPORTED
the evidence backs this
confidence 91/100
Substantial empirical evidence across multiple methodologies supports the view that institutional quality and governance capacity are key determinants of cross-country wealth and productivity differences.
Evidence for · 5
Endogenous Growth and Cross-Country Income Differences
2000 · cited by 404
Endogenous growth modeling demonstrates that institutional and parameter differences across countries generate permanent productivity and per capita income divergences.
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More for · 4
Institutional development, transaction costs and economic growth: evidence from a cross-country investigation
2015 · cited by 25
Cross-country panel regression analysis shows that higher transaction costs, reflecting weaker institutional development, exert a persistent and robust negative effect on economic growth.
Does Institutional Quality Strengthen the Globalization-growth Nexus? A Cross Country Analysis
2021 · cited by 2
Empirical analysis reveals that the benefits of economic globalization on growth depend heavily on meeting a minimum threshold level of institutional quality.
Regulatory Design and Long-Term Growth: Insights from China's Experience for Latin America.
2026 · cited by 0
Comparative panel-data analysis indicates that streamlined regulatory design and effective institutional coordination are decisive drivers of long-term economic performance.
Institutional Quality, Digital Human Capital, and Economic Performance: A Structural Equation Modeling Approach to Cross-country Analysis
2026 · cited by 0
Structural equation modeling demonstrates that institutional quality exerts a strong, statistically significant direct effect on cross-country economic performance and total factor productivity.