HUMAN WELL-BEING EFFECTS OF INSTITUTIONS AND SOCIAL CAPITAL

Authors

  • MINA BALIAMOUNE-LUTZ

    1. Baliamoune-Lutz: Associate Professor of Economics, Coggin College of Business, University of North Florida, Jacksonville, Florida 32224. Phone 904-620-1223; fax 904-620-1300; E-mail mbalimao@unf.edu
    Search for more papers by this author
    • *

      This is a revision of a paper presented at the Western Economic Association International 80th annual conference, San Francisco, July 4–8, 2005. The author is grateful for helpful comments and suggestions made by Wade Martin and two anonymous referees. The author is also very grateful to Enrico Colombatto and the International Center for Economic Research, Turin, Italy, for a fellowship that supported research on the effects of social capital and institutions on development in Africa. A more extensive study of these issues appears in Baliamoune-Lutz (2005). The usual disclaimer applies.


Abstract

We examine the effects of income, institutions, and social capital—proxied by the level of corruption and ethnic tensions—on literacy and life expectancy in Africa. Random effects estimates show that income has a robust positive influence. GMM estimates indicate that corruption reduces the effectiveness of institutions in promoting literacy. However, this effect is not monotonic; improvements in the corruption index within the high corruption range reduce the effectiveness of institutions, while continuous improvement within the low corruption range enhances the effectiveness of institutions. Similarly, ethnic tensions reduce the effectiveness of institutions. Based on these findings, we conclude that social capital and institutions can complement each other. (JEL O11, O17, Z13)

Ancillary