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Institutional Kuznets curve? An empirical analysis with panel data.

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Title: Institutional Kuznets curve? An empirical analysis with panel data.
Authors: Martínez-Navarro, Diego1 (AUTHOR) dmn011@ual.es, Amate-Fortes, Ignacio1 (AUTHOR) iamate@ual.es, Guarnido-Rueda, Almudena1 (AUTHOR) guarnido@ual.es, Oliver-Márquez, Francisco J.1 (AUTHOR) fom445@ual.es
Source: Structural Change & Economic Dynamics. Dec2022, Vol. 63, p35-39. 5p.
Subjects: World Bank, Panel analysis, Generalized method of moments, Data analysis, Kuznets curve, Income inequality, Moments method (Statistics)
Abstract: • This paper shows evidence that institutions are deteriorating in developed economies in general, which responds to a phenomenon similar to that proposed by Kuznets. • For this reason, using the index of quality of institutions based on the World Bank's World Governance Indicators, and data on GDP per capita from the Maddison project, the empirical evidence in favour of the existence of an institutional Kuznets curve is contrasted. • For this purpose, the Prais-Winsten estimation and the Generalized Method of Moments (GMM) are used, showing robustness in the results. • Likewise, this work is the first brick of many others in this research path, such as: Are geographical differences found? at what speed does the quality of the institutions converge or diverge? Is the worsening of the institutions inevitable?. The hypothesis that institutions directly influence income distribution has been defended by numerous authors. However, it may be observed that institutions are deteriorating in developed economies, which poses the question: could a phenomenon similar to the Kuznets curve be applied? Using the Worldwide Governance Indicators' index of the quality of institutions from the World Bank, and data on per capita GDP from the Maddison project (using a sample of 156 countries in the period of 1996–2015), there appears to be empirical evidence in favour of the existence of an institutional Kuznets curve, using the Prais-Winsten estimation and the Generalised Method of Moments (GMM). [ABSTRACT FROM AUTHOR]
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Database: Engineering Source
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Abstract:• This paper shows evidence that institutions are deteriorating in developed economies in general, which responds to a phenomenon similar to that proposed by Kuznets. • For this reason, using the index of quality of institutions based on the World Bank's World Governance Indicators, and data on GDP per capita from the Maddison project, the empirical evidence in favour of the existence of an institutional Kuznets curve is contrasted. • For this purpose, the Prais-Winsten estimation and the Generalized Method of Moments (GMM) are used, showing robustness in the results. • Likewise, this work is the first brick of many others in this research path, such as: Are geographical differences found? at what speed does the quality of the institutions converge or diverge? Is the worsening of the institutions inevitable?. The hypothesis that institutions directly influence income distribution has been defended by numerous authors. However, it may be observed that institutions are deteriorating in developed economies, which poses the question: could a phenomenon similar to the Kuznets curve be applied? Using the Worldwide Governance Indicators' index of the quality of institutions from the World Bank, and data on per capita GDP from the Maddison project (using a sample of 156 countries in the period of 1996–2015), there appears to be empirical evidence in favour of the existence of an institutional Kuznets curve, using the Prais-Winsten estimation and the Generalised Method of Moments (GMM). [ABSTRACT FROM AUTHOR]
ISSN:0954349X
DOI:10.1016/j.strueco.2022.08.008