Economic performance and institutions: capturing the dependent variable

In the debate about the relationship between institutions and overall economic performance, the dependent variable has received scant attention - in contrast to the independent variable(s). This paper tries to enhance the understanding of the link between institutions and performance by presenting and assessing a substantively grounded conceptualization and operationalization of overall economic performance based on economic growth, employment, and public debt. A fuzzy-set ideal-type analysis of performance of 19 OECD countries between 1975 and 2005 reveals substantial variation across countries and over time that cannot sufficiently be accounted for by two key institutional features: corporatism and consensus democracy. Corporatism and consensus democracy may account