Institutions and Poverty

This dissertation analyzes the effects of institutions on poverty by developing an innovative framework for embedding institutions into poverty analysis. In doing so, it makes a clear distinction between economic and political institutions. It reaches a number of key conclusions. First, stronger economic institutions are found to have direct positive effects on the incidence and severity of poverty measured at either at $1.25 or $2 a day. Moreover, economic and political institutions are also found to reduce poverty by stimulating economic performance. In this regard, poverty rates are found to decline faster in countries with presidential systems because they register stronger economic performance than countries with parliamentary systems. Similarly, economic performance and poverty reduction are found to be more significant under proportional representation. Finally, this study finds no evidence that the types of political regimes and electoral systems affect differently poverty through public policy and corruption.