TITLE:
The Role of Institutional Quality in Economic Efficiency in the GCC Countries
AUTHORS:
Ibtisam Al Abri, Alanood Al Bulushi
KEYWORDS:
Institutional Quality, Economic Efficiency, Productivity, Solow Model, GCC
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.6,
December
13,
2022
ABSTRACT: Advancements in productivity throughout history led
to continuous improvements in standards of living; ultimately if current
generations had not known more than their ancestors, their standards of living
would not have been very different from their ancestors. Respectively, long
term economic growth and development are largely
dependent on understanding the sources of productivity. Recent literature has identified
institutional quality as a significant factor in explaining different
productivity levels across countries; therefore, this study provides insight
from the Gulf Cooperation Council (GCC) region which has not been previously
explored in this context. The main objective of this study is to investigate
the association between institutional quality and economic growth for a
developing high-income region with a distinct economic structure. The study
also determines the total factor productivity (TFP) for Oman using the Solow
model. Findings suggest different dimensions of institutional quality have a
heterogeneous impact on productivity, while the indicator on contract
enforcement and property rights had a positive impact on productivity, the
indicator on regulatory quality had a negative effect. Ultimately, these
findings provide a guide to policymakers in the GCC on factors that promote
growth and those that hinder it.