The Effects of Institutional Structure on Economic Growth: An Application on G-20 Countries (1996-2014)

In parallel to the evolution of the economic growth theories regarding the main indicators of long term economic growth, this article econometrically analyses the long term effects of the institutional structure on the economic growth of G-20 countries with different development levels for the period of 1996-2014. In order to examine the impact of the institutional structure on economic growth more coherently and to compare the results, G-20 countries are included in the analysis under two sub-groups respectively as economically developed G-9 countries and developing G-10 countries. Thus the article aims to evaluate the impact of the institutional structure on the differentiation of the long term economic growth performances and economic development levels of the countries under the groups G-9 and G-10. The article concludes that, effects of the institutional structure indicators on the economic growth have been positive and significant in statistical terms in the sub-group G-9, while they have been usually negative and significant in sub-group G-10 during the period analysed. Nonetheless, the article indicates that, along with the physical and human capital accumulation, possession of different institutional structures are more effective in differentiation of the long term economic growth performances and development levels of the countries in the groups of G-9 and G-10 during the sample period.