After the sobering experience with 1st generation models of economic development, it is now generally acknowledged that, among other factors, institutional quality holds the key to prevailing patterns of prosperity around the world. The role of institutions for economic development is emphasized among others by North (1990, 1993), Knack and Keefer (1995), Lin and Nugent (1995), Hall and Jones (1999), Rodrik (2000), Campos (2000), Havrylyshyn and van Rooden (2000), and Acemoglu et al. (2005). Rodrik (2004, p.10) addresses the problem of causality of institutions and economic development by stating that “high-quality institutions are perhaps as much a result of economic prosperity as they are their cause. But however important the reverse arrow of causality may be, a growing body of empirical research has shown that institutions exert a very strong determining effect on aggregate incomes.”weiterlesen