Is there an institutional Kuznets curve? New evidence using asymmetric kernel analysis
Keywords:
GDP Per Capita, institutional quality, Asymmetrics kernel methodAbstract
In this work, we examine the existence of a possible institutional Kuznets curve between GDP per capita and institutional quality over a sample of 132 countries between 2000 and 2017. With the kernel method, interesting results are observed. Our results show an inverted U-shaped relationship between institutional quality and countries' GDP per capita. Specifically, we find that between the interval [0; $60,000], GDP per capita significantly increases institutional quality. In the meantime, GDP per capita creates ideal conditions for an environment that builds confidence among economic agents. Above $60,000, any increase in GDP per capita will significantly reduce institutional quality, which still remains positive. On the other hand, we note that countries will have good institutional quality from a GDP per capita estimated at $20,000. These results show that to improve institutional quality, it would be necessary to act on development only for countries whose GDP per capita is below $40,000.
References
Acemoglu D. Johnson S.. Robinson J.A. (2002). Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution. The Quarterly Journal of Economics. 117(4). pp. 1231-1294 http://www.jstor.org/stable/4132478?origin=JSTOR-pdf
Acemoglu D. Johnson S.. Robinson J. and Yared P. (2008). Income and Democracy. American Economic Review. 98(3). p.808-42 http://dx.doi.org/10.1257/aer.98.3.808
Acemoglu D. and Robinson J. (2015). La faillite des nations : les origines de la puissance. de la prosperité et de la pauvreté. Editions Markus Haller.
Albdulahi M. E.. Shu. Y. and Khan M.A. (2019). Resource rents. economic growth. and the role of institutional quality: A panel threshold analysis. Resources Policy. 61. pp. 293-303 https://doi.org/10.1016/j.resourpol.2019.02.011
Anokhin S. et Schulze W. S. (2009). Entrepreneurship. innovation. and corruption. Journal of Business Venturing. 24(5). pp. 465-476 https://doi.org/10.1016/j.jbusvent.2008.06.001
Arvin M. B. Pradhan R. P. and Nair M. S.(2021). Are there links between institutional quality. government expenditure. tax revenue and economic growth? Evidence from low-income and lower middle-income countries. Economic Analysis and Policy. 70. pp. 468-489 https://doi.org/10.1016/j.eap.2021.03.011
Attila G.(2011). Corruption and quality of public institutions: evidence from Generalized Method of Moment. Working Papers halshs-00556802. HAL.
Barro R. J. (1999). Determinants of Democracy. Journal of Political Economy 107(S6). pp. 158-183 https://doi.org/10.1086/250107
Belarbi Y. Hamdi F.. Khalfi A. and Souam S.(2021). Growth. institutions and oil dependence: A buffered threshold panel approach. Economic Modelling. 99. pp.105-477 https://doi.org/10.1016/j.econmod.2021.02.018
Capelle-Blancard G. Crifo P.. Diaye M.A. and Oueghlissi R. and Scholtens B. (2019). Sovereign bond yield spreads and sustainability: An empirical analysis of OECD countries. Journal of Banking & Finance. 98. pp. 156-169 https://doi.org/10.1016/j.jbankfin.2018.11.011
Corradini C. (2019). Local institutional quality and economic growth: A panel-VAR analysis of Italian NUTS-3 regions. Economics Letters. 198. pp. 109-659 https://doi.org/10.1016/j.econlet.2020.109659
Epstein D. L.. Bates R.. Goldstone J.. Kristensen I. and O'Halloran S. (2006). Democratic Transitions. American Journal Of Political Science. 50(3). pp. 551-569 https://doi.org/10.1111/j.1540-5907.2006.00201.x
Glaeser E. L.. Ponzetto G. A. M. and Shleifer A. (2007). Why Does Democracy Need Education? Journal of Economic Growth. 12(2). pp. 77-99 https://www.jstor.org/stable/40216116
Grossman. G. M. and Krueger. A. B. (1995). Economic growth and the environment. The Quarterly Journal Of Economics. 110(2). pp. 353–377. https://doi.org/10.2307/2118443
Gurdal T.. Aydin M. and Inal V.(2021).The relationship between tax revenue. government expenditure. and economic growth in G7 countries: New evidence from time and frequency domain approaches. Economic Changes Restructuring. 54. pp. 305–337 https://doi.org/10.1007/s10644-020-09280-x
Hall R. E. and Jones C. I. (1999). Why do some countries produce so much more output per worker than other ? Quarterly Journal of Economics. 114(1). p. 83–115.
Jobert. T. & Karanfil. F. (2012). Formation et déformation de la Courbe de Kuznets Environnementale pour les émissions de CO2. Innovations. 37(1). 11-26. https://doi.org/10.3917/inno.037.0011
Kaufman D.. Kraay A and Mastruzzi. Massimo M.(2009). Governance Matters VIII: Aggregate and Individual Governance Indicators. 1996-2008 (June 29. 2009). World Bank Policy Research Working Paper No. 4978. Available at SSRN: https://ssrn.com/abstract=1424591
Kuznets S. (1955). Growth And Income Inequality. American Economic Review 45(1). pp. 1-28. https://assets.aeaweb.org/asset-server/files/9438.pdf
Law S.H.. Azman-Saini W.N.W. and Ibrahim M. (2013). Institutional quality thresholds and the finance – Growth nexus. 37(12). pp. 5373-5381 https://doi.org/10.1016/j.jbankfin.2013.03.011
Mohamadi A.. Peltonen J. and Wincent J. (2017). Government efficiency and corruption: A country-level study with implications for entrepreneurship. Journal of Business Venturing Insights. 8. pp. 50-55 https://doi.org/10.1016/j.jbvi.2017.06.002
Nawaz S.. Iqbal N.. Khan M.A. (2014). The impact of institutional quality on economic growth: panel evidence. The Pakistan Development Review. 53 (1). pp. 15-31 https://www.jstor.org/stable/24397923
North. D. C. (1990). Institutions. Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
North D. C. (2003). The role of institutions in economic development. unece discussion papers series no.2
Onakoya A.B.. Afintinni O.I.. Ogundajo G.O. (2017). Taxation revenue and economic growth in africa. Journal of Accounting and Taxation. 9 (2). pp. 11-22 https://doi.org/10.5897/JAT2016.0236
Panayotou T. (1993). Empirical tests and policy analysis of environmental degradation at different stages of economic development. ILO Working Papers 992927783402676. International Labour Organization. http://www.ilo.org/public/libdoc/ilo/1993/93B09_31_engl.pdf
Papaioannou E. and Siourounis G. (2008). Democratisation and Growth. The Economic Journal. 118(532). pp. 1520-1551 https://doi.org/10.1111/j.1468-0297.2008.02189.x
Papyrakis E. and Gerlagh R.(2004). The resource curse hypothesis and its transmission channels. Journal of Comparative Economics. Elsevier. 32(1). pp. 181-193 https://doi.org/10.1016/j.jce.2003.11.002
Salman M.. Long X.. Dauda L. and Mensah C. N. (2019). The impact of institutional quality on economic growth and carbon emissions: Evidence from Indonesia. South Korea and Thailand. Journal of Cleaner Production. 241. pp. 118-331 https://doi.org/10.1016/j.jclepro.2019.118331
Singh et Pradhan (2020). Institutional quality and economic performance in South Asia. Journal Of Public Affairs. 22(1). e2401 https://doi.org/10.1002/pa.2401
Published
How to Cite
Issue
Section
Copyright (c) 2025 Jean Michel Banto, Marc-Arthur Diaye, Jacques Konan Konan
This work is licensed under a Creative Commons Attribution 4.0 International License.
Allows users to: distribute and copy the article; create extracts, abstracts, and other revised versions, adaptations or derivative works of or from an article (such as a translation); include in a collective work (such as an anthology); and text or data mine the article. These uses are permitted even for commercial purposes, provided the user: gives appropriate credit to the author(s) (with a link to the formal publication through the relevant URL ID); includes a link to the license; indicates if changes were made; and does not represent the author(s) as endorsing the adaptation of the article or modify the article in such a way as to damage the authors' honor or reputation. CC BY
