The relationship of core-periphery in the context of institutional quality differences between countries

The gradual increase in the level of developmental differences after the twentieth century has led to many studies on the explanation of this situation in the literature. In this context, the core-periphery and institutional economics approach emphasize the important points in increasing social welfare. In this study, it is aimed to evaluate the differences between the countries according to the institutional quality differences in the context of sub-country groups formed within the core-periphery. In the first part of the analysis, 8 sub-country groups were determined by the club convergence method. In the second part of the analysis, the institutional approach explaining developmental differences between countries for country groups was tested. By applying cointegration analysis and panel pooled average group estimator method for the country group obtained as a result of club convergence analysis, the relationship between development and institution is examined. According to the results of the analysis, country groups that emerged as a result of club convergence showed consistent results in the context of core periphery approach. The institutional approach, which was examined within the scope of the country groups, revealed different results as economic institutions and political institutions. In all sub-groups of the core, semi-periphery and periphery countries, the effect of economic freedom on development was demonstrated. In addition, the effect of democracy on development has an increasing effect in the core and semi-periphery country groups, while the results in the countries of the periphery have statistically meaningless results.