Good-Governance and Poverty Reduction Relationship a case study of Nigeria

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1 Australia Joural of Basic ad Applied Scieces, 7(): 1, 13 ISSN Good-Goverace ad Poverty Reductio Relatioship a case study of Nigeria Muhammad Yusuf, C.A. Malarvizhi 1 Faculty of Maagemet Multimedia Uiversity, Persiara Cyberjaya, Selagor, Malaysia Abstracts: The aim of this paper is to examie whether goverace causes poverty or alteratively poverty reductio causes goverace i Nigeria. We applied ARDL approach to co itegratio i order to establish the directio of the relatioship betwee goverace ad poverty reductio i Nigeria. The result suggests that three out of six idicators of goverace itegrate with poverty, but all of the idicators took a egative sig. Suggestig that the idicators of goverace are too coarse to capture the uaces of iteractio betwee goverace ad poverty i Nigeria, results from the Error correctio represetatio suggest that there is reverse causality, Our study have some implicatio for ecoomic research ad for ecoomic policy, research o goverace must focus o real issues that ivolves actual rules, rather tha o coceptually vague assessmet of goverace scores. O the policy, this paper suggests that Nigeria eeds to focus o critical growth drive policies that sustaied growth ad poverty reductio i the short ad medium term. Key worsd: INTRODUCTION A fast-growig comparative literature o research o goo- goverace approach to developmet stresses good- goverace widely, defied as the traditioal ad istitutios that determie how authority is exercised i a coutry (Kaufma, et al., ) is importat for ecoomic developmet. This uderstadig surface from the earlier pioeerig work of istitutioal ecoomists such as Dauglass North ad Macur Olso, which led to the wide spreads differet types of cross-sectioal empirical evideces suggestig a positive relatioship betwee goverace structures ad ecoomic growth. No woder, i recet developmet a lot of agreemet have bee reached amog growth ecoomists, developmet specialists ad iteratioal policy- makers that good goverace is basic ad ecessary for ecoomic growth ad poverty reductio (Kaufma et al., 3). Despite comparative literature o goverace structures ad social determiats of ecoomic growth ad poverty, the goverace matters to developmet have bee marred with umber of short comigs. Crosssectioal studies prove that good goverace matter for ecoomic growth have bee challege o the grouds of reverse causality problems (Chod ad Caldero ). Attempt to addressed causality problems has bee marred with measuremet error (Kacks ad Keefer, (3), missig variables Gleaser et al., (), coceptual vagueess (La Porta et al., (). The weakess of these types of cross-sectioal regressio exercise poited out by Quibria () i his ow famous paper Does Goverace matter? Yes, No or may be some evidece from Developig Asia. The mai reaso why cross-sectioal studies fail to capture the uaces of iteractios betwee goverace ad ecoomic growth is because the model was developed based o the implicit goverace model which exist oly i istitutios available i Wester richer coutries. I the case of Nigeria, the causality of the various liks ad chaels of ifluece betwee goverace, growth ad poverty is ot well uderstood. Despite deficit i its goverace performace, Nigeria ecoomic growth, is risig with poor goverace performace ad risig growth, is also associated with risig poverty. Recet data has idicated ecoomic growth risig to the average of 7% sice,, which is higher tha the.5% target rate for appreciable poverty reductio withi Sub Sahara Africa (MDG, 1). This apparet paradox of risig growth with poor goverace performace ad risig growth with risig poverty, cotradict the theoretical as well as empirical evideces suggestig that the causal relatioship betwee goverace, ecoomic growth ad poverty reductio is a oe way causatio ruig from goverace to growth ad poverty reductio ad that causatio from growth to goverace is weak or egative, attempt to resolve these cotroversies is yet settled. The objective of this paper to determie whether Good goverace causes poverty reductio or alteratively poverty reductio causes good-goverace. Followig the itroductio the remaiig part of the paper is structured as follows, sectio two provide methodology of the paper, while sectio three preset the results ad fially sectio four provide discussio ad policy recommedatio ad coclusio. Methodology: We revisit six measures of goverace used i the curret ecoomic literature, i a attempt to examie each, oe empirical validity, we follow the commo practice i the literature, by followig the work of Gleaser et al (), ad Quibria, (), i order to check the validity of the empirical evideces established through Correspodig Author: Muhammad Yusuf, Faculty of Maagemet Multimedia Uiversity, 31 Persiara Cyberjaya, Selagor, Malaysia. Telephoe ; dadumey@yahoo.com

2 the use of these measure of goverace idicators. Eve though most of these idicators are quite heterogeeous, some reflectig process, while others seek to capture performace, but yet these are the idicators used to show goverace cause growth ad poverty reductio. We cosider four such measures motivated by the work of Alberto Alesia (199), Bureaucratic efficiecy, ad absece of corruptio ad the Bureaucratic quality ad rule law. We are motivated because Alesia used these idicators to established the fact that goverace cause growth, ad he preseted his work at the 1997 Aual World Bak coferece o Developmet Ecoomic, O the basis of this piece work World Bak ad other iteratioal door agecies imposed aid coditioality s to poor coutries stressig, they must have quality of istitutio before they ca qualify for foreig assistace. Despite serious modelig problems of short time frame for Alesia study, ad the uwarrated ormative iferece usig perceptio based idexes, to coclude o the causal relatioship betwee goverace ad growth, we placed this argumet i coutry specific situatio ad assess the validity of these empirical evideces uder a case study approach to Nigeria. We applied autoregressive distributed approach to co -itegratio recetly developed by Pesera et al, (1), which is a breakthrough i the area of modelig time series data, ad the most simples way of establishig the log ru relatioship amog ecoomic variables uder ivestigatio. Why we decided to adopt ARDL approach i this study, is because this approach eables us to ivestigate the log ru relatioship betwee goverace, ecoomic growth ad poverty reductio i Nigeria. Cosiderig the small sample size of our data ARDL model will eable us to overcome small sample size problems i co- itegratio aalysis. Model Specificatio: We cosider the practice i the literature followig the work of Abdul Jalil ad Yig Ma (), we modify ad specified the model below: m IPO= β+ β1 IPO t-1 + β ECt-1+ β3 QBt-1+ β SCt-1+ β5 CPt-1+ β RLt-1+ j i β7 CCt-1+ β IEQt-1+ β9 IGDPt-1+ β1ipot-i + β11ect-1+β1qbt- 1+β13SCt-1+β1CPt-+β15RLt-1+β1CC+β117IEQt-1+β1IGDPt-1+et (1) The ull hypothesis of o log ru relatioship is examied through F-test of the joit sigificat of the lagged level coefficiet of equatio (1). Ho: β1, β11, β1, β13, β1, β15, β1, β17, β1, = agaist the alterative hypothesis Hi: β1, β11, β1, β13, β1, β15, β1, β17,, β1 However for the error correctio represetatio the equatio is estimated as follow: m IPO= β+ β1 IPO t-1 + β ECt-1+ β3 QBt-1+ β SCt-1+ β5 CPt-1+ j i β RLt-1+ β7 CCt-1+ β IEQt-1+ β9 IGDPt-1+ ECMt-1+Ut Where IPO is the proxy of poverty takig i logarithm form, ad is the depedet variables. While IEC, IQB, ISC, ICP, IRL, ICC, IEQ, IGDP are the proxies of Accoutable executive, Quality of the bureaucracy, strog civic society, rule of law, competitiveess of political participatio ad cotrol of corruptio respectively ad IEQ, IGDP is the proxies of iequality of icome ad ecoomic growth, they represet the explaatory variables i the model ad et, is the white oise term. Sources of Data: Data o relative poverty or head cout poverty ratio proxy as IPO, which measure the percetage of the populatio below the poverty lie, was collected from various issues of the Poverty Assessmets Survey data from the Natioal Bureau of Statistic of Nigeria, ragig from Natioal expediture survey of , Nigeria livig stadard surveys of 3/ ad Harmoized Nigeria livig stadard survey (HNLSS, 9/1). Data o GDP per capita Proxy as IGDP were collected from World Bak Developmet idicators, ad Cetral Bak of Nigeria aual statemet of accouts various issues. Similarly Data o iequality of Icome were obtaied from the various Natioal Poverty Assessmets Survey, various issues ad Daiger square assembled data set o iequality of icome for Nigeria. Measuremet of the idicators of goverace is ot a easy task cosiderig the abstracts ature of the cocepts, this made a large amout of these idicators i priciple multi dimesioal. Cosiderig this multi dimesioality of these idicators, we follow the work of (Kack ad Keefer 1997, Mauro 1995, to use differet 5

3 measures for each dimesio of the idicators. We have o optio other tha to utilize the existig set of data that was made available sice our aim is to check the validity of the empirical evideces comig out from this data set For the purpose of this study, we follow the work of Compos, N.F. ad Nuget, J.F (1999) ad collected data from differet various sources due to recet developmet i which data o these idicators are made available. We specifically collected data from World Wide Goverace idicators, Coutry Risk Guide ICRG data house, Busiess Eviromet Risk Itelligece (BERI), Polity 11 data house, Freedom house data set, World Bak CPIA assemble data set. We start with Accoutability of the Executive; we collect data from the Gurrs Polity 111 data set. To measure the quality of Bureaucracy which is the secod idicator of goverace, i our model, we collected data from ICRG data house ad data from BERI data house. The rule law, which is aother variable i our model, data was collected from ICRG idicators. Data o Strog Civil liberties were foud from the Gastil (ow called freedom house idicators data set. Data o Competitive Political Participatio, where sources from Gurrs Polity 111 data set, data o the absece of corruptio where also made available from the private iteratioal ivestmet risk services ad World Bak CPIA data set. Presetatio of the Results: Table 1 Characteristics of the Sample Data IGDP EC QB SC CP RL CC IEQ IPO Mea Media Maximum Miimum Std.Dev Skewess Kurtosis Jargue-Bera Probability Sum Sum sq E Dev Note: The optimal lags for coductig ADF test were determie by AIC (Akaike iformatio criteria) * idicate sigificat at 1% level ** idicate sigificat at 5% level ad *** idicate sigificat at 1%. Table 1: Uit Root Test Result Variabl es ADF Statistics Critical values ADF Stat Critical value PP statistics Critical value PP statistic Critical value Level Level First dif. First dif. at level at level First dif. First dif. IGDP EC QB SC CP RL CC IEQ Evidece from the results i table.1. usig Dickey fuller test, all series are foud to be statioary at level, with the exceptio of RP ad IEQ which were o statioary at level, to make all series statioary we move to test uit root at first differecig, i table.1., the results idicates that after differecig all the series are statioary at 5% level of sigificace, implies that the computed Mackio statistics is greater i absolute term tha the calculated critical values. Table : Autoregressive Distributed Lag Estimates Test statistics Sigificace level Boud testig critical value with o tred F- Statistics 1() 1(1) IGDP % IPO IEQ 13.3 EC QB % 1%

4 SC.599 CP RL 3.5 CC 1.39 Note: The critical values are take from Naraya () However, from the result obtaied i table the computed F statistics for joit sigificace of all lags variables i the model with exceptio of EC, have exceeded the upper critical value at Table 3: Log ru coefficiet Poverty as a Depedet Variable (IPO) Regressors Coefficiet T-Ratio IGDP -.51E IEQ EC QB SC CP RL CC Note: ARDL( 1,1,1,,1,1,,1,1) selected based o Schwarz Bayesia Criterio Diagostic test: Serial Correlatio (1) = 11.3 Fuctioal Form (1) =.55 Normality (1) = 3.79 Heteroscedasticty (1) =.1 The ext step is to estimate the log ru relatioship, betwee poverty ad goverace by takig poverty as a depedet variable, from the results i table 3, three out of six goverace s measures appear statistically sigificat but take a egative sig, idicatig goverace move with poverty i a egative way i the log ru. However, Corruptio appear with high magitude implyig that 1 percet chages i corruptio will cause 9% chages i poverty i Nigeria, this has idicate how structural ad edemic corruptio is i Nigeria. The positive sig i the corruptio coefficiet is idicatig, corruptio ad poverty move i the same directio i Nigeria, high corruptio is associated with high poverty. The positive sig ca be explai by a particular set of commo explaatio foud i the ecoomic theory which argued that corruptio, by itself, does ot produce poverty. Rather, corruptio has direct cosequeces o ecoomic growth factors, itermediaries that i tur produce poverty. Thus the relatioship is idirect. Corruptio affects poverty by first impactig ecoomic growth factors, which, i tur impact poverty levels. I other Words, icreased corruptio reduces ecoomic ivestmet, distorts market, hiders competitios; create iefficiecy by icreasig the costs of doig busiess ad icreases icome. The impact of corruptio o these ecoomic factors affect poverty, implyig icrease corruptio will lead to icrease poverty which proves the positive sig i our results plausibly possible. This has bee supported by a umber of empirical studies. (see e.g Kacks.. Gupta et al, 199). However, iequality of icome is statistically sigificat but havig egative sig ad a corrupted value of , this may be due to the thiess of the data ad the very limited period of time data o distributio is made available, uder which a particular sig of causality may be tested. All the remaiig variables do ot appear statistically sigificat with poverty reductio i Nigeria. How does oe explai these seemigly paradoxical results? With goverace idicators had take a egative sig. Does this suggest that goverace is uimportat for ecoomic growth ad poverty reductio? Perhaps that may ot be exactly, the better iferece would be that the covetioal measures of goverace are too coarse to capture the uaces of goverace, growth ad poverty reductio iteractios i Nigeria. The mai reaso why these goverace measures fail to capture the uaces of iteractios betwee goverace ad growth i the log ru aalysis, is that all these set of data oly measure outcomes, ot some permaet characteristics that North refers to, as such all these measures, rise with Per capita icome, ad they are highly volatile. However, to ivestigate these seemigly paradoxical results, more rigorously, we estimate a parsimoious poverty equatio through the error correctio represetatio i table Table : Error correctio model Regress Coef IPO IGDP EC Coeff. QB Coeff.SC Coeff.CP Coeff.RL Coeff.CC ors DGDP -.5E (1.15 ) -. (-.97). (.) -.59 (-.3). (.131) - (.-313) DPO (.3195) -.7 (-.719) (-.5) E-3 (-.53) -.59 (.3) (-5.9) -.39 (-3.799) 7

5 DEQ (-5.9) DEC (-1.19) DQB (-.3977) DSC -.37 (-1.9) DCP (-.3) -.51 (-5.99) (-3.515) 39.3 (.5) 19.1 (.7597) (-5.1) -.7 (-5.5) (-.93) (-5.5) (.9) (-.153) -3.3 (-.3) -.95 (-1.57) (-.93) -.3 (-.53) (-3.5) (-.1) ( ) -.53 (-5.5) -.17 (-1.19) (-.1) (-.9) (-.371) (-.51) (.933) -.57 (-.1) -. (-7.31) DRL (-.751) 3.33 (.1599) (-3.51) (.933) (-.9) DCC 3.97 (.1.57) ECM( -.13 (-5.971) -1. (-5.957) -15 (-3.) (.19) (-.119) 3.9 (.7).97 (3.57) -1.9 (-1.73) (.33) Depedet variable IPO Ecm = IPO +.15E1IGDP + 19.IEQ +.13EC +13.3QB SC +1.3CP RL CC Depedet variable IGDP Ecm= IGDP +.15EEC+ 19.QB +.13CP+13.3SC RL+1.33CC IEQ IPO Diagostic test: R ==.95 R- Bar squared.9157 SR = DW=.3 However, we examie the Dyamic Poverty Error Correctio Model, takig poverty as depedet variables. We established error correctio term ECM which is the residual of the log ru equatio; if it is egative ad statistically sigificat, we said it is affirmative. Thus i the dyamic poverty model ECM is statistically sigificat with a correct sig, havig a value of ad a coefficiet of -.13, which has idicated a quick adjustmet to the stable state of equilibrium. Havig a value more tha -1 idicate a quick adjustmet, sice -1 idicate oe year adjustmet, but havig a value greater tha -1 idicate faster movemet of adjustmet back to equilibrium after some deviatios i the short ru ad all variables move together toward log ru equilibrium. This has established oe way causatio from poverty from explaatory regressors to poverty. However, we tur to the short ru results, i order to fid out the directio of the relatioship i the short ru. Thus i the short ru the coefficiet of the lag dgdp is egative ad statistically ot sigificat. The lag value of deq which stad for iequality of icome is egative ad statistically sigificat. But the problem is that iequality took a egative sig which make it difficult to iterpret. While the value of the lag coefficiet of dqb which is the quality of bureaucracy is egative ad statistically sigificat, implyig that the directio of causatio goes from quality of govermet bureaucracy to poverty reductio i the short ru, the coefficiet of the lag value of dsc which is strog civic society is sigificat but take a egative sig. Implyig strog civil society affect the level of poverty i the short rus, egatively. The coefficiet of the competitive political participatio is also egative. Idicatig that poverty is affected by the competitive political participatio, i the short ru, i a egative way, i other words there is uidirectioal causality ruig from competitive political participatio to poverty reductio. Poverty reductios deped o ope ad trasparet policy decisio makig process where poor ma is give the chace to participate ad have iputs i decisios makig ad goverace. Poor trasparet ad poor ope policy makig will lead to icrease i poverty. However, surprisigly the coefficiet of the lag value of rule of law is egative ad sigificat; idicatig rule of law affects poverty i the short ru i a egative way. The coefficiet of the lag value of cotrol of corruptio is egative ad ot statistically sigificat, implyig corruptio does ot affect poverty i the short ru i Nigeria, ad there is o causal likage betwee corruptio ad poverty i the short ru. It is worth reportig that all models pass through diagostic stability tests, the diagostic tests of serial correlatio, fuctioal for specificatio, ormality ad hetroscidasticity. All diagostic results are preseted immediately below table..,..5,,. respectively.

6 Diagostic Tests: A: Serial Correlatio (1) =.915[.] B: Fuctioal Form (1) =.1339[.9] C: Normality (1) =.[.1] D: Heteroscadasticity (1) =.199[.13] We fail to reject the ull hypothesis of serial correlatio, ad we also fail to reject Heteroscadasticity test. We fail to reject the ull hypothesis of fuctioal. We ca coclude that our model have passed the diagostic test. Stability test of Depedet variable Test: Fig. 1: Poverty The straight lies represet critical bouds at 5% sigificace level Fig. : ccoutability of Executive The straight lies represet critical bouds at 5% sigificace level The straight lies represet critical bouds at 5% sigificace level Fig..1: 1 Ecoomic growth 9

7 The straight lies represet critical bouds at 5% sigificace level Fig..1.: Competitive politic Fig. 3: Rule of law The straight lies represet critical bouds at 5% sigificace level 1 Fig. : Iequality of Icome The straight lies represet critical bouds at 5% sigificace level I figures above we test the stability of the depedet variable which is the GDP per capita icome ad we coclude the plot CUSUM has idicate stability of the depedet variables as it falls withi the two parallel lie ad does ot exceed 5% level of sigificat ad it is withi the two parallel lie i our plot, they does ot crossed. Discussio O The Results: We attempt to discuss the results by aalyzig the good-goverace idicators withi the estimated log ru growth model. Cosiderig the results i table 3 four idicators of goverace were sigificatly itegrated with growth suggestig that goverace causes ecoomic growth. But the apparet egative sig take by these idicators suggest that there is o straight forward aswer to the questio, because what the egative sig is suggestig is that the covetioal measures of goverace are too coarse to capture the uaces of goverace s growth iteractios uder Nigeria situatio. The mai possible reasos why these idices appear with egative sig are because; as oted amog others by Rodrik ad Mukad (5) good ecoomic priciples do ot cheaply traslate ito uique istitutioal ad goverace solutio, but rather require to be plated to particular ecoomic ad social cotext. This lie of argumet is also supported by Quibria (), that all dimesio of goverace are ot ecessary importat for growth ad poverty reductio at all stages of developmet. Other reasos, why the egative sig appear, may possibly because the good goverace measures 1

8 did ot explore the importat differeces i history, geography, or iitial coditio of a particular coutry. These are importat issues eglected i the good goverace measures uder cross-sectioal studies. Other importat possibilities as poited out by Gleaser et al (), improvemet i good-goverace scores aloe is ot sufficiet for ecoomic growth ad poverty reductio, uless supported by similar improvemet i huma ad social capital. I the same lie of reasoig Kacks (3), have also ackowledge that the existig goverace measure does ot address specific reforms, because, they are based o a very broad ad aggregated idicators of istitutioal performace. As such the idicators are ot eve measurig the istitutio parse, but the structure idividual equilibrium. To address the questio more squarely, we look at the results of the error correctio represetatio which is preseted i table However, lookig at the results leaves us skeptical about the causality. What the results suggested is the existece of reverse causality, which has bee the major issue i growth regressio. The problem is ot oly because causality ru from per capita GDP to goverace, but also because may goverace structures are measured at the ed of too close to the ed of the growth period. I fact two way causality implies that the curretly domiat good goverace ageda suffers two way types of theoretical ad developmet problems. The first blow is the assumptio that causality etirely rus from goverace to growth igorig the importat possibility that ecoomic growth also chages goveraces. As rightly oted by Chag, (1), ecoomic growth chages goverace through a umber of ways, First, raised i wealth due to growth may geerate greater eeds for better quality of goveraces. Secodly, higher wealth equally, makes good goverace more affordable, because istitutios are costly public goods the greater their quality the more expesive they become. Thirdly, Ecoomic growths geerate ew agets of chage, demadig ew goverace istitutios. Today most advace coutries i the World posses these istitutios after, ot before, their ecoomic developmet, democracy, moder bureaucracy, bakig regulatio so forth, but compellig o poor coutries to implemet somethig o oe has doe at early stage of developmet. More specifically, the advace rich coutries whose istitutio is stellar i iteratioal comparism did ot have most of those good goverace s istitutios i their early stage of developmet, it was after they become rich they acquired most of them. The regressio causality through the use of measures of goverace idicators may ot be sufficiet i helpig us to idetify the specific growth drivig goverace policies that ca address istitutioal bidigs costraits. Aswer to this questio requires goig beyod the covetioal wisdom of goverace growth iteractio, ad explore a big historical lesso o how successful developers overcomes similar istitutioal costraits to Nigeria, takig a referece case study of somewhere i Asia or eve earlier i Japa or eve earlier i Europeas developmet. Coclusios: We try to examie the causal likage betwee goverace ad poverty reductio i Nigeria, by explorig whether good goverace causes growth or alteratively poverty reductio causes goverace i Nigeria, the issues of causality has bee the area of geeral cotroversy i the goverace poverty discourse, we employed ARDL approach to co itegratio i order to fid out the directio of the relatioships betwee goverace ad poverty reductio i s case study of Nigeria. The fidigs of our study suggested that good goverace measures are too coarse to capture the uaces of goverace poverty reductio i Nigeria, because goverace measures are based o the implicit assumptio of a model that oly exist i the wester rich coutries, to uderstad the uace of iteractio betwee goverace ad poverty, cotext specific situatio must be takig ito cosideratio which icludes, history eviromet ad culture of a particular coutry local cotet. Our studies have importat policy implicatio for Nigeria, the good goverace capabilities require for poverty reductio must the oe that ca drive growth i the short ad medium term REFERENCES Alesia, A., & R. Perotti, 199. The political ecoomy of growth: a critical survey of the recet literature. The World Bak Ecoomic Review, (3): Alesia, A., 199. The political Ecoomy of High ad low Growth, i Aual World Bak coferece o Developmet Ecoomics 1997, Washigto DC: World Bak Chag, H.-J., 1. Hamlet without the price of Demark: How Developmet has disappeared from Today Developmet Discourse i S.K. Kha ad J. Christiase (eds), Towards New Developmetalism: Market as meas rather tha master, Abigdo: Routlege, pp: 7-5. Chog, A., A ad C. Calderso,. O the causality ad Ecoomic Growth, Ecoomics ad policies, 1(1): 91. Glaeser, E.L., R. La Porta, F. Lopez-de-Silaes, & A. Shleifer,. Do istitutios cause growth? Joural of Ecoomic Growth, 9(3): Gupta, A., V. Hariariya, D. Quass, & A. Rajarama, 199. Method ad apparatus for structurig the queryig ad iterpretatio of semi structured iformatio: Google Patets. 11

9 Kaufma, D., A. Kraay, & M. Mastruzzi,. Goverace matters III: Goverace idicators for 199, 199,, ad. The World Bak Ecoomic Review, 1(): 537. Kaufma, D., A. Kraay, & P. Zoido-Lobató,. Goverace matters II: updated idicators for -1 (Vol. 77): World Bak Publicatios Kacks, S. ad P. Keefer, 3. Does social capital Have a ecoomic payoff: A cross-coutry empirical ivestigatio,, i Kacks, S. (Ed.), Democracy goverace ad growth, A Arbor, The uiversity of Michiga press. La Porta, R., F. Lopez-de-Silaes, A. Shleifer, & R. Vishy, The quality of govermet. Joural of Law, Ecoomics, ad orgaizatio, 15(1): -79. Mauro, corruptio ad Growth. Quarterly Joural of Ecoomics, 11(3): North, D., 199. Istitutios, Istitutioal Chage, ad Ecoomic Performace. cambridge: Cambridge Uiversity Press Olso, M., 19. The Rise ad Fall of Natios: Ecoomic Growth, Stagflatio ad Social Rigidities. Yale Uiversity Press.: New Have. Pesara, M.H., ad R.P. Smith, Structural Aalysis of co- itegratig VAR joural of Ecoomic Survey 1: Quibria M.G., 5. Rethikig Developmet Effectiveess: Facts issues ad policies, World Ecoomic (): Rodrik, D.,. Istitutios for high-quality growth: what they are ad how to acquire them. Studies i Comparative Iteratioal Developmet (SCID), 35(3):