Panel Paper: Constitutions and Economic Development Evidence from the American Indian Nations

Saturday, November 8, 2014 : 11:15 AM
San Juan (Convention Center)

*Names in bold indicate Presenter

Randall Akee, University of California, Los Angeles, Uwe Sunde, University of Munich and Miriam Jorgensen, University of Arizona
This paper presents an empirical examination of economic and institutional development. Utilizing a novel data set on American Indian Nations, we investigate how constitutional design affects economic development, while holding the broader legal and political environment fixed. Instrumental variables regressions, using the party of the US President as an instrument for constitutional design, indicate that parliamentary systems (versus presidential) have a positive effect on economic development. Robustness checks suggest that the results are not explained by differences in other institutions or geographic characteristics. We find that the effects may operate through larger public-sector employment and more equitable income distributions.