INSTITUTIONS, GOVERNMENT STABILITY AND HUMAN CAPITAL ACCUMULATION

Abstract

The objective of this paper is to study the influence of institutional quality on the human capital accumulation process. This paper builds on prior theoretical developments which establish a micro-foundation link between human capital accumulation and institutional quality. Using a panel data series from 1960 to 2010, we observe that political instability and institutional quality do affect long-term human capital accumulation. Greater political stability and better institutions clearly foster human capital growth, thus promoting economic growth and prosperity.