Empirical Study On Political Institutions And Economic Growth

In the recent decades, the importance of politics institution on economic growth has been recognized among many scholars and policy-makers, For institutions are still taken as part of natural factors and excluded form the framework of the mainstream growth theory, the mainstream growth theory fails to discover the impact of institutions on the economic growth. Consequently, whenwe explore the reasons for the economic phenomena, it fails to offer a forceful explanation that why the economy takes off or lands in a stagnant state during various periods of time in some countries, especially developing one.For economic growth source of problems, the theory of endogenous economic growth and institutional determinism respectively emphasis on which its own element has decisive influence on the economic growth, and the determinants of different elements between primary and secondary relations did not form unified understanding. In order to make up for these defects of the mainstream theory of economic growth, to obtain a better interpretation of the causes of economic growth, in this paper,we took the political institutions into the mainstream of economic growth theory, combined with the institution analysis and the theory of modern economic growth and researched political institutions、its impact on the economic growth and the contribution of economic growth. The debate on the relationship between institutions and economic development is discussed, focusing on two illustrations, i.e., the impact of democracy and political instability on economic growth. Various pitfalls of existing research are identified, like sensitivity of the outcomes to model specification, sample heterogeneity, measurement of political variables, and the treatment of the time dimension. This paper compares various indicators for political institutions.about the issues raised in this paper, The research method of this paper is mainly the mathematical model and econometric model method adhered by the mainstream economists. In the mathematical model using limit analysis method, rotation regression technique method and phase diagram schematic method, in the model, the time series and the panel measurement method. Specifically, in a time series model in this paper is the Least Median of Squares (LMS) and Rousseeuw (1984) proposed the Least Trimmed Squares (LTS) method to deal with institution variable sample heterogeneity problems, and can better grasp the political institutions and economic growth influence each other. The first chapter, introduction. Includingl, explain on the paper’s research background and significance of topics;2, elaborate the research method and train of thought.3paper structure.The second chapter describes review of the literature about the political institution and economic growth:1, the political institution contribution:Institutional determinism view2, political institution contribution:contribution of endogenous growth theory perspective.The third chapter, The political institution’s influence on economic growth measurement method’s research, we studied the extant several defects about political institution’s impact on the economic growth:problem of econometric model to select the type of problem, possible sample heterogeneity, problems of democratic measure length, time scale problem.1will discuss these shortcomings and outline the approach that I favor to deal with them. I think this will give us an answer to these questions can be trusted.In the fourth chapter, we used90countries from1975to2005as the sample, to research relationship of political institution and economic growth by Extreme Bounds Analysis. Our main conclusion is that more political freedom fosters economic growth, but that the level of freedom is not related to growth. In other words, our findings imply that more political freedom will bring countries more quickly to their steady state level of economic growth (if they are below that level), but that the level of steady state growth is not affected by the level of political freedom.