Investigating the Factors Affecting the Membership of Institutional Clusters in Developing Countries: The Cluster Algorithm Approach

Document Type : Original Article

Authors

1 PhD Candidate in Economics, Faculty of Economics and Management, Urmia University, Urmia, Iran

2 Associate Professor of Economics, Faculty of Economics and Management, Urmia University, Urmia, Iran

3 Associate Professor of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran

10.29252/jem.2023.229643.1804

Abstract

One of the most important factors affecting the economic performance of countries is the quality of institutions. Therefore, identifying the factors affecting institutional quality and specifically the quality of good governance provides the possibility of adopting appropriate policies to increase the quality of governance. Therefore, in this research, the formation of institutional clusters (good governance) and the factors affecting membership in institutional clusters in developing countries during the time period of 2002-2020 using the log t test of Phillips and Soule and also the probit method is discussed. Our results indicate the existence of numerous institutional clusters in different countries that are caught in the trap of weak institutions. Specifically, the government effectiveness institutional index includes five convergent clusters and one non-convergent cluster, the institutional index regulatory quality includes eight convergent clusters and one non-convergent cluster, the institutional index of rule of law includes six convergent clusters and one non-convergent cluster, as well as the institutional index control of corruption, which includes five convergent clusters and one non-convergent cluster. On the other hand, we found that levels of human capital and economic growth, foreign trade, as well as government size, are effective in determining whether a country is institutional growth path.

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References

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