THE QUALITY OF GOVERNMENT

THE QUALITY OF GOVERNMENT

Second Draft, August 1998 | Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Robert Vishny
The authors investigate the determinants of government quality in a large cross-section of countries, using measures of government intervention, public sector efficiency, public good provision, size of government, and political freedom. They find that poor countries, those near the equator, ethnolinguistically heterogeneous countries, those using French or socialist laws, and those with high proportions of Catholics or Muslims exhibit inferior government performance. Larger governments tend to be better performing. The historical factors, such as ethnic heterogeneity and legal systems, significantly influence government performance, suggesting that economic, political, and cultural theories of institutions are all important. The paper also discusses the theoretical frameworks for these determinants and presents empirical results based on data from 152 countries.The authors investigate the determinants of government quality in a large cross-section of countries, using measures of government intervention, public sector efficiency, public good provision, size of government, and political freedom. They find that poor countries, those near the equator, ethnolinguistically heterogeneous countries, those using French or socialist laws, and those with high proportions of Catholics or Muslims exhibit inferior government performance. Larger governments tend to be better performing. The historical factors, such as ethnic heterogeneity and legal systems, significantly influence government performance, suggesting that economic, political, and cultural theories of institutions are all important. The paper also discusses the theoretical frameworks for these determinants and presents empirical results based on data from 152 countries.
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