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Institutions of conflict management and economic growth revisited: a short note

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Abstract

We study the effects of institutions of conflict management like corporatism, trust, civic norms and group membership on economic growth. By employing Schneider and Wagner’s (Kyklos 54:509–532, 2001) model and data from 1990–2011, we show that corporatism has (still) a positive coordination effect and a negative rent-seeking effect. The total effect is positive for most countries.

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Notes

  1. Compare, for example, de Grauwe and Skudelny (1999) and Rodrik (1999). De Grauwe and Skudelny (1999) specifically analyse inefficiencies of bureaucracy, corruption, the extent of political participation, rent seeking as well as the size of the state.

  2. Other studies analysing the effects of institutional factors on unemployment are Nickell et al. (2005), Amable et al. (2007), Bassanini and Duval (2006) and Baccaro and Rei (2007). Their results are not consistent, however, and the papers do not refer specifically to conflict management institutions, but to institutions somewhat related to it: Employment protection legislation, active labour market regulation, minimum wages, unemployment benefits, trade union power, wage inflexibility or taxes.

  3. Compare Alesina and Perotti (1996), Barro (1991), Easterly (2000), Easterly and Levine (1997), Rodrik (1999), Vis et al. (2012), Woldendorp (2011), Acocella et al. (2009) and Acocella et al. (2010).

  4. GINI indicators are not available for every year in the sample. Missing values are imputed by using the most recent available indicator. The number of available indicators varies considerably across countries. There are 20 values for Germany, but only 8 for Ireland, for example.

  5. As a matter of fact, the decision on which items to include in the index is arbitrary to some extent. The items we choose are, to the best of our knowledge, the best suitable ones among those available, both with respect to the content as well as for guaranteeing comparability with the results based on Tarantelli’s (1986) index. Moreover, we did some sensitivity analysis to see that our results are very robust to changes in the number of index-components.

  6. Index-values do not differ for each year, however. In Fig. 1 we indicate how many different values we have for each country.

  7. Remarkably, the lowest value of corporatism, according to our index, is to be found in Switzerland. This country, however, has a long tradition of social partnership and strikes are only seldom observed. We have, of course, checked the values of the components of our index, and presume that in Switzerland, a corporatist political culture is present, although the structure of the institutions does not enforce such a culture. In Switzerland, for example, only 48 % of employees are covered by wage bargaining agreements (Austria: 99 %), but this fact does not necessarily mean that trade unions and employer associations do not coordinate their actions. Since the index-values for Switzerland are somewhat awkward, we have carried out our estimations both with and without data on Switzerland. We see only very marginal differences.

  8. We acknowledge that in principal, we have too few observations (of the trust- and civil norms index-values as well as the group membership indicator) for profound panel-data analysis. Regressions on the cross-section, however, yield similar results.

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Authors and Affiliations

  1. Department of Economics, University of Linz, Linz, Austria

    Friedrich Schneider & Florian Wakolbinger

  2. Gesellschaft für Angewandte Wirtschaftsforschung (GAW), Innsbruck, Austria

    Florian Wakolbinger

  3. Department of Public Economics, University of Innsbruck, Innsbruck, Austria

    Stefan D. Haigner & Stefan Jenewein

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  1. Friedrich Schneider
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  2. Stefan D. Haigner
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  3. Stefan Jenewein
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  4. Florian Wakolbinger
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Correspondence to Friedrich Schneider.

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Schneider, F., Haigner, S.D., Jenewein, S. et al. Institutions of conflict management and economic growth revisited: a short note. Empirica 41, 577–587 (2014). https://doi.org/10.1007/s10663-014-9255-1

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