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David Coyne and Chih-ming Tan
''Do political institutions yield multiple growth regimes?''
( 2012, Vol. 32 No.2 )
We investigate the effects of political institutions on economic growth. We specifically explore this relationship while controlling for heterogeneity and model uncertainty. We use threshold regression (Hansen 2000) to search for possible nonlinearities and/or interaction effects with respect to political institutions. We also implement a novel approach to account for theory uncertainty by applying Bayesian model averaging in the threshold regression context. We find that less democratic countries, specifically those with less competitiveness in executive recruitment, follow a different growth process than those with higher competitiveness.
Keywords: Economic Growth, Institutions, Threshold Regression, Regression Trees, Bayesian Model Averaging
JEL: O4 - Economic Growth and Aggregate Productivity: General
C2 - Single Equation Models; Single Variables: General
Manuscript Received : Apr 22 2012 Manuscript Accepted : May 14 2012

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