Institutional quality and the effect on economic growth

The functioning of institutions plays a key role in the development of national economies. The importance of the concept of corporate quality in the effective management of institutions in the economy is increasing day by day. Rule of law, control of corruption, political stability, prevention of violence, freedom of expression, accountability, efficiency of management and quality of regulations are indicators used to measure the institutional quality of countries. The aim of this study is to investigate the effect of institutional quality factors on the economic growth of countries. For this purpose, the effect of the Institutional Quality Index, which was established by using the key components analysis method, by using the institutional quality indicators published by the World Bank, on the GDP per capita growth rate according to real Gross Domestic Product (GDP) and purchasing power parity was examined by panel data analysis method. The data set of 10 countries in the Newly Industrialized Countries category were used in the study covering the period 2002-2016. As a result of the study, it was determined that the increase in the institutional quality index had a positive effect on the economic growth of the countries.