Determinants of Institutional Quality: A Case Study of IMF Programme Countries

Taking a panel data of IMF member countries, this chapter primarily focuses on the IMF programme countries, during 1980–2009; a time period during which the number of IMF programmes witnessed an increasing trend. Firstly, important determinants of economic- and political institutional quality in IMF programme countries are estimated by applying the System-GMM approach, so as to find significant determinants among them. Here, a parliamentary form of government, aggregate governance level, civil liberties, openness, and property rights all enhance overall institutional quality. Specifically, greater monetary- and investment freedom are conducive for political institutional quality, while military in power impacts negatively. Moreover, economic growth is conducive for enhancing economic institutional quality.