Public Policies versus Institutional Structures: A New Perspective of Assessing Economic Growth Dynamics in Developing Nations

Sidrah Saleem, Saima Sarwar


This study is performed to find out the impact of policy and institutional factors on the economic growth of the developing countries. These include Economic management, Structural policies, Social inclusion/equity and Governance. Panel data of 72 countries is being taken for this study and the time period is from 2005-2013. Simple ordinary least square (OLS) model has been applied to find the impact of these variables on economic growth of developing countries and the results showed that overall institutions are related more to the economic growth of these nations as compared to policy contents. On the other side from institutional parameters, role of budgetary management and equity of public resource use by the government is positively contributing to economic performance of these nations. Nevertheless few variables have showed negative impact as well in which the process resource mobilization and transparency of the system is exhibiting more negative role in economic growth of these nations. Overall results showed that non-economic parameters of the political systems are more closely interrelated with the process of economic growth in these nation as compared to pure economic factors.

Key Words: Fiscal Policy, Economic Integration, Budget, Debt Management, Government Regulations, Economic Development

JEL Classification: E63, F15, H61, H63, I18, O1


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