The quality of institutions: A genetic programming approach

The new institutional economics has studied the determinants of the quality of institutions. Traditionally, the majority of the empirical literature has adopted a parametric and linear approach. These forms impose ad hoc functional structures, sometimes introducing relationships between variables that are forced and misleading. This paper analyses the determinants of the quality of institutions using a non-parametric and non-linear approach. Specifically, we employ a Genetic Program (GP) to study the functional relation between the quality of institutions and a set of historical, economical, geographical, religious and social variables. Besides this, we compare the obtained results with those employing a parametric perspective (Ordinary Least Square Regression). Following the empirical results of our application, we can conclude that the parametric perspective adopted in previous papers about institutional quality could be accurate.