A Study on Institutional Quality Index in Developed Countries: The Case of G-7 Countries
Özet
This study by Necip Dündar calculates and evaluates the Institutional Quality Index (IQI) for the G-7 countries—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—over the period 2000–2018 using the methodology of Nagar and Basu (2002) alongside Principal Component Analysis. The index incorporates fifteen variables categorized into economic, social, and political factors, explaining over 70% of total variance with strong statistical reliability. The empirical findings reveal that while Germany, Japan, the UK, and the USA generally maintained high institutional quality from 2001 to 2015, Italy and France initially diverged negatively due to weaker economic components. Since 2015, the UK and the USA experienced sharp declines in institutional quality driven by a weakening in democratic elements, whereas Germany, Japan, Italy, and France showed recent upward trends. Overall analysis for 2015–2018 demonstrates that Canada achieved the highest institutional quality score, whereas Italy recorded the lowest performance owing to persistent shortcomings in the rule of law, government effectiveness, judicial independence, property rights protection, and corruption control. Ultimately, the paper emphasizes that strengthening institutional framework parameters is essential for sustaining economic performance and guiding effective policymaking.
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