The Causal Impact of Institutional Quality

The causal impact of institutional quality refers to how the strength and integrity of a country's institutions—such as government, legal systems, and regulatory bodies—directly influence economic development, stability, and overall well-being. Strong institutions enforce rules fairly, protect rights, and ensure efficient resource use, leading to better outcomes like economic growth, reduced corruption, and improved public services. Conversely, weak institutions can result in instability, corruption, and poor development. Understanding this impact helps us see how improvements in governance and institutional frameworks can drive positive, long-term progress for societies.