Economic reform and political stagnation: The inconsistent patterns of institutional change

Abstract

This study examines whether convergence in institutional quality distinguished by economic and political dimensions of institutions has occurred across countries. The study uses data from 81 countries over the period of 1985 to 2018. The study tests the convergence hypothesis by using three different measures of institutional quality capturing political and economic dimensions of institutions. The empirical results show that convergence in economic institutional quality has occurred and most countries with weak economic institutions have a higher rate of change compared with countries with strong economic institutions. In contrast, for political institutions, the convergence process is short-lived.