| Abstract [eng] |
The main aim of this master thesis is to determine whether economic and political institutions impact long-term economic development or not, with GDP per capita growth being the major measure. The study intends to evaluate the influence of institutional variables such as Rule of Law (ROL), Control of Corruption (COC), on sustained growth across different nations over time. The master thesis has three key parts: the literature study, the empirical investigation, its results and interpretations, and the conclusion with recommendations. Highlighting the work of North (1990), Acemoglu, Rodrik, and other top researchers, the literature review addresses the theoretical framework of institutional economics. It presents institutions as the "rules of the game" and hence helps to shape economic incentives and government systems by pointing out their importance. Highlighting their influence and function in guaranteeing long-term stability and prosperity, the thesis examines political and economic institutions in depth. Using data from 43 nations spanning 1996 to 2023, the empirical study uses a fixed effects panel regression model. While ROL and COC are the main independent variables, the dependent one is GDP per capita growth. Several diagnostic tests were run to ensure the strength of the results. Statistical adjustments using such as White cross-section standard errors and logarithmic transformation of the dependent variable helped to identify and correct issues including multicollinearity, heteroskedasticity. The findings show a statistically significant impact of institutional qualities on long-term economic development. Rule of Law and Control of Corruption confirm their importance in creating an environment favorable to development by showing significantly positive impacts. The thesis ends by suggestion that sustained economic development is gained by strengthening institutional frameworks. It implies that future studies should concentrate on causation, dynamic models, and geographical comparisons. To improve economic results, policymakers are urged to create stable and fair legal framework, anti-corruption policies, and efficient regulatory systems. |
