Department of Economics and Business Economics

What matters for growth in Europe? Institutions versus policies, quality versus instability

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

  • Niclas Berggren, Research Institute of Industrial Economics, Stockholm, Denmark
  • Andreas Bergh, Lund University, Denmark
  • Christian Bjørnskov
We study how the quality and instability of institutions and policies affect economic growth in 35 European countries. While stability entails valuable predictability, instability can reflect reforms that offer positive long-run consequences. We construct measures of quality and instability for a panel of countries for 1984–2009. Results suggest that the quality of policy is growth-promoting. Notably, this positive effect becomes larger the more unstable policies are. The findings suggest that for European countries, the benefits of policy flexibility – due to experimentation and learning or making rent seeking more difficult – dominate the costs of reduced predictability.
Original languageEnglish
JournalJournal of Economic Policy Reform
Pages (from-to)69-88
Number of pages20
Publication statusPublished - 2015

Bibliographical note

Campus adgang til artiklen / Campus access to the article

    Research areas

  • Growth, Institutions, Policies, Instability, Reforms, Europe, Institutional change

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