Appraising institutional challenges in the early stages of development

Second, when the correlation is significant, the causality behind it is ambiguous: does it run from good institutions to favourable development outcomes – or the opposite? Third, it is not clear whether indicators describe the quality of specific institutions – like the accountability of the executive or the independence of the judiciary – or some joint observable outcome of the functioning of the. [...] (2021) for the current version of the database 6 The common factor is the equivalent of the 'first principal component' in a standard principal component analysis of the whole set of individual indicators related to a specific domain and their value in the countries being covered. [...] Respondents were thus asked to answer the questionnaire in the light of their experience over the last 10 years, rather than on the basis of the last few months and the electoral platform of the new president. [...] All of these possibilities form a kind of tree, the top of which is the rate of growth of the economy, with the branches being the immediate determinants of growth, the sub-branches being the channels through which these determinants may fail, and the bottom of the tree being all the potential constraints just listed. [...] Political history and the current state of the political game or the structure of political power are other essential factors that will need to be considered at a later stage of the diagnostic when the causes for the persistence of weak institutional equilibria and the political economy of reforms will be the focus of attention.