Institutional Environment and Growth in Brazil

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1 Introduction 2
2 The deductive model 3
3 Literature review 4
4 Theoretical framework and generation of hypothesis 5
5 Scientific Research Design 8 5.1 Methods of empirical analysis 8 5.2 Construct measurement of independent variables 9
6 Presentation of results 9
7 Discussion of results 10
8 Conclusion 15
9 Bibliography 17


The prosperity and wealth of nations are closely linked with economic growth. Accelerating the development of economic growth in a sustained way is therefore one of the most important issues in economics. Economists have long used a variety of approaches to shed light on why some countries experience faster growth than others. In the vast amount of literature on the subject there are
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Second, we build hypotheses on the basis of our theoretical framework. Third, we apply it to data. Finally, we deduct from the study. Our approach emphasises quantitative data and is highly formalized. In this paper we will use the deductive model as proposed by Sekaran (1992). The model has 8 steps as illustrated below and largely corresponds to the structure of the paper. The steps are shown i a linear fashion, but in the reality the process is more dynamic.

Literature review

The concept of institutions and its influence on economic growth can be traced back to the functionalistic perspective, which draws upon the ideas of August Comte (1852), Herbert Spencer (1851) and Èmile Durkheim (1893). The functionalistic approach is centred upon the argument that, if society is to exist, its members must make provision for certain functional requirements. Institutions are the principal structures where these critical tasks for social living are organised, directed and executed (Hughes et al. 2002). Institutions have been studied from several viewpoints and disciplines ranging from sociology, organisational psychology, to new institutional economics originating from the learning of transaction cost economics. In this paper we will follow the new institutional economic approach.

The transaction cost view on organisations can be divided into two groups. First, motivation cost, which deals particularly with costs of opportunistic behaviour and agency cost
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