Institutions and National Development in Latin America: A Comparative Study

We review the theoretical and empirical literatures on the role of institutions on national development as a prelude to present a more rigorous and measurable definition of the concept and a methodology to study this relationship at the national and subnational levels. The existing research literature features conflicting definitions of the concept of “institutions” and empirical tests based mostly on reputational indices, with countries as units of analysis. The present study’s methodology is based on a set of five strategic organizations studied comparatively in five Latin American countries. These include key federal agencies, public administrative organizations, and stock exchanges. Systematic analysis of results show a pattern of differences between economically-oriented institutions and those entrusted with providing basic services to the general population. Consistent differences in institutional quality also emerge across countries, despite similar levels of economic development. Using the algebraic methods developed by Ragin, we test six hypotheses about factors determining the developmental character of particular institutions. Implications of results for theory and for methodological practices of future studies in this field are discussed.