How does Institutional Quality Affect Economic Growth? Panel Data Analysis for G20 Countries

Year 2025, Volume: 23 Issue: 1, 23 - 41

Serdar Yay , Zeynep Ezanoğlu , Recep Akan

Abstract

The relationship between institutional quality and economic growth has attracted considerable attention in recent years. These studies have been conducted under the umbrella of institutional economics, which has been pioneered by names, such as Douglass C. North, Nobel Prize winner in Economics. Institutional quality is defined as the effectiveness of institutions and the enforceability of rule sets. Regulatory quality is measured by indicators such as the rule of law, control of corruption, judicial independence and protection of property rights. There is an important link between institutional quality and economic growth. In the literature, institutional quality factors have a positive effect on economic growth. This study tested the relationship between institutional quality and economic growth in developing countries and concluded that institutional quality indicators positively affect economic growth.

Keywords

Economic Growth, Institutional Quality, Panel Data Analysis

Supporting Institution

İzmir Demokrasi Üniversitesi Bilimsel Araştırma Projeleri Koordinasyon Birimi

Project Number

HIZDEP.İİBF.-2303

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