TY - JOUR
T1 - It's a Small World After All
T2 - Internet Access and Institutional Quality
AU - Sheehan, Kathleen M.
AU - Young, Andrew T.
N1 - Publisher Copyright:
© 2015 Western Economic Association International.
PY - 2015/10/1
Y1 - 2015/10/1
N2 - Using a panel of up to 114 countries covering the years 1990 through 2010, we estimate the effect of Internet use on changes in countries' Economic Freedom of the World (EFW) scores. The point estimates suggest that the marginal effect is generally positive. However, starting from above-average EFW scores (>7.7 out of 10; examples in 2010 include the UK, Switzerland, and Hong Kong) the marginal effect turns negative. Taking this interaction into account, the marginal effect is positive and statistically significant for countries starting at initial EFW scores of around 6 or less. Examples of countries with 2010 EFW scores near this threshold include China, Nigeria, and Pakistan. We discuss mechanisms that potentially generate this conditional relationship between Internet use and institutional change.
AB - Using a panel of up to 114 countries covering the years 1990 through 2010, we estimate the effect of Internet use on changes in countries' Economic Freedom of the World (EFW) scores. The point estimates suggest that the marginal effect is generally positive. However, starting from above-average EFW scores (>7.7 out of 10; examples in 2010 include the UK, Switzerland, and Hong Kong) the marginal effect turns negative. Taking this interaction into account, the marginal effect is positive and statistically significant for countries starting at initial EFW scores of around 6 or less. Examples of countries with 2010 EFW scores near this threshold include China, Nigeria, and Pakistan. We discuss mechanisms that potentially generate this conditional relationship between Internet use and institutional change.
UR - http://www.scopus.com/inward/record.url?scp=84939794110&partnerID=8YFLogxK
U2 - 10.1111/coep.12095
DO - 10.1111/coep.12095
M3 - Article
AN - SCOPUS:84939794110
VL - 33
SP - 649
EP - 667
JO - Contemporary Economic Policy
JF - Contemporary Economic Policy
SN - 1074-3529
IS - 4
ER -