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Institutional Transformations, Polity and Economic Outcomes: Testing the North-Wallis-Weingast Doorsteps Framework
Author: Mr. Marc G Quintyn and Sophia Gollwitzer
Series:
IMF Working Papers
Volume/Issue:
Volume 2012: Issue 087
Language:
English
Publication Date:
01 Mar 2012
DOI:
https://doi.org/10.5089/9781475502510.001
ISBN:
9781475502510
ISSN:
1018-5941
Pages:
58
Keywords:
WP; open access order; government expenditure; political system; Gini coefficient; NWW transition framework; institutions; economic performance; political performance; transition; income inequality; open access society; Income inequality; Personal income; Corruption; Europe; Asia and Pacific
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper tests the theoretical framework developed by North, Wallis and Weingast (2009) on the transition from closed to open access societies. They posit that societies need to go through three doorsteps: (i) the establishment of rule of law among elites; (ii) the adoption of perpetually existing organizations; and (iii) the political control of the military. We identify indicators reflecting these doorsteps and graphically test the correlation between them and a set of political and economic variables. Finally, through Identification through Heteroskedasticity we test these relationships econometrically. The paper broadly confirms the logic behind the doorsteps as necessary steps in the transition to open access societies. The doorsteps influence economic and political processes, as well as each other, with varying intensity. We also identify income inequality as a potentially important force leading to social change.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund