The role of political, religious, and social institutions in economic development: A cross-country study

The role of institutions in economic development has received a great deal of attention over the last fifty years. Institutions refer to the political, social and religious framework within a society. This study examines the role of institutions in influencing economic performance in a select number of developing countries. Given the nature and dimensions of problems confronting developing countries, the study hypothesizes that these various institutions play a prominent role in shaping the nature and process of economic development.;The sample of countries examined was selected from three groups based on the classification system used in the 1994 World Development Report published by the World Bank. The groups are classified broadly as Low, Middle, and Upper-Middle income economies. Three countries were selected from each category. From the low income group Ethiopia, Sierra-Leone and Ghana were selected; from the middle income group, Philippines, Cameroon and Columbia were selected. Finally, Argentina, Brazil and the Republic of Korea represent the upper-middle income group. After a review of the historical background, political, social and religious framework of each country, economic and socio-economic data is also presented. These include GNP per capita, growth and structure of production, life expectancy, health, education and literacy rates. An analysis of the relationship between the economic and non-economic data then follows.;The results strongly suggest that political instability and social/religious dualism are factors that significantly affect low-income economies. As we move upward in country categories, these factors are less influential in explaining the pace of economic progress. For middle and upper-middle economies, strong literacy rates and a lesser degree of social and religious dualism help to explain their relative advancement in development. I conclude that non-economic indicators play just as significant, if not more important, role in explaining the process of economic development.;Many developing countries, such as Mexico, have recently made substantial economic progress. On the other hand, other developing countries, such as Nigeria, have failed to make any progress in developmental efforts. Reasons for this include inadequate infrastructure, social dualism and political instability (by which is meant threats and/or actual takeovers of the government either by military forces, political parties or terrorists). An evaluation of economic performance based on economic indicators such as GNP, trade statistics, industry and manufacturing levels, show that some developing countries have made economic progress. Yet, even those countries continue to be plagued by large unemployment, high poverty rates, and malnutrition. The study of non-economic factors, as reflected through the institutions in these countries, reveals the importance of non-economic indicators on economic performance.