The relationship between crisis, institutional quality and economic growth

Institutional economics approach that puts institutions in the center of economic analysis takes part in economic growth analyses, especially starting from 1990?s. Besides economic factors, institutional economics approach uses non-economic factors like institutions, institutional structure, and institutional quality in economic growth analyses. In this thesis, the relationship between institutional quality and economic growth through changes in institutional quality due to economic crises is investigated. In empirical analyses, Mankiw, Romer and Weil (MRW) growth model and panel data analyses are used for the countries; Argentina, Mexico, and Brazil among Latin America Countries; Thailand, Malaysia, Philippines, and South Korea among Asia countries; and lastly Turkey for the period 1984-2010. The results reveal that the institutional variables of law and order, religious tensions, military intervention level in politics, democratic accountability and internal and external conflicts variables significantly and positively affect economic growth. In addition, as the changes in institutional quality due to economic crises are considered, bureaucracy quality, socioeconomic conditions, investment profile and democratic participation variables are found to be significant institutional variables which are positively affecting economic growth level. It conclusion the results provide that changes in institutional quality due to economic crises positively affect economic growth.