Do institutions matter in the very long-run?-New evidence from OECD countries

Institutions are an important determinant of long-run economic growth. However, most studies only examine this relationship over a relatively short period and do not regularly include institutional variables in growth models. This article applies the pooled mean group (PMG) estimator to a panel of 18 OECD countries over 138 years. We find evidence that institutions matter for economic growth in the very long-run and conclude that economists should include them in any empirical application of the neoclassical growth model. Our result is robust to various robustness checks.