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The effect of formal and informal institutions on poverty reduction

Despite meaningful achievement with regards to poverty, it is disconcerting that about 1.5 billion people across the globe are multi-dimensionally poor and over 900 million are vulnerable and might be poor in no distance future. Although having good institution is a prerequisite of the wor...

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Main Authors: Bugaje, Idris Bashir, Abd Rahman, Azmawani, Said, Rusmawati, Jo, Ann Ho, Chindo, Sulaiman
Format: Article
Published: Exeliq Publishing 2018
Online Access:http://psasir.upm.edu.my/id/eprint/74144/
https://exeliqpublishing.com/2018/04/08/the-effect-of-formal-and-informal-institutions-on-poverty-reduction/
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spelling my.upm.eprints.741442023-01-13T08:09:39Z http://psasir.upm.edu.my/id/eprint/74144/ The effect of formal and informal institutions on poverty reduction Bugaje, Idris Bashir Abd Rahman, Azmawani Said, Rusmawati Jo, Ann Ho Chindo, Sulaiman Despite meaningful achievement with regards to poverty, it is disconcerting that about 1.5 billion people across the globe are multi-dimensionally poor and over 900 million are vulnerable and might be poor in no distance future. Although having good institution is a prerequisite of the workings of socio-economic conditions of any country, studies on institution focus more on economic growth, happiness, the welfare of the people and others. This paper examined the effect of entrepreneurship-related institutional factors in reducing poverty in 18 selected countries. The study considering the panel nature of the data used adopted generalized method of moments (GMM) over other conventional panel methods. The results show that poverty headcount, poverty gap, squared poverty gap, and watts index are negatively and significantly related to government support and policies, and culture and social norms. Meanwhile, poverty headcount is positively but insignificantly related to governmental programs and taxes and bureaucracy. However, poverty gap, squared poverty gap, and watts index are negatively related to governmental programs and taxes and bureaucracy are found to have a negative and significant effect on squared poverty gap. The study recommends that government should strengthen its policies supporting entrepreneurship by making policies that are linked towards supporting entrepreneurship and by invariably integrating the informal institutions as they are effective in reducing poverty. Entrepreneurial programs should be targeted at the people who are extremely poor so as to have the desired effect while government should reduce taxes as well as make market entry easy. Exeliq Publishing 2018 Article PeerReviewed Bugaje, Idris Bashir and Abd Rahman, Azmawani and Said, Rusmawati and Jo, Ann Ho and Chindo, Sulaiman (2018) The effect of formal and informal institutions on poverty reduction. International Journal of Advanced Studies in Social Science & Innovation (IJASSI), 2 (1). 50 - 65. ISSN 2600-7746 https://exeliqpublishing.com/2018/04/08/the-effect-of-formal-and-informal-institutions-on-poverty-reduction/ 10.30690/ijassi.21.04
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description Despite meaningful achievement with regards to poverty, it is disconcerting that about 1.5 billion people across the globe are multi-dimensionally poor and over 900 million are vulnerable and might be poor in no distance future. Although having good institution is a prerequisite of the workings of socio-economic conditions of any country, studies on institution focus more on economic growth, happiness, the welfare of the people and others. This paper examined the effect of entrepreneurship-related institutional factors in reducing poverty in 18 selected countries. The study considering the panel nature of the data used adopted generalized method of moments (GMM) over other conventional panel methods. The results show that poverty headcount, poverty gap, squared poverty gap, and watts index are negatively and significantly related to government support and policies, and culture and social norms. Meanwhile, poverty headcount is positively but insignificantly related to governmental programs and taxes and bureaucracy. However, poverty gap, squared poverty gap, and watts index are negatively related to governmental programs and taxes and bureaucracy are found to have a negative and significant effect on squared poverty gap. The study recommends that government should strengthen its policies supporting entrepreneurship by making policies that are linked towards supporting entrepreneurship and by invariably integrating the informal institutions as they are effective in reducing poverty. Entrepreneurial programs should be targeted at the people who are extremely poor so as to have the desired effect while government should reduce taxes as well as make market entry easy.
format Article
author Bugaje, Idris Bashir
Abd Rahman, Azmawani
Said, Rusmawati
Jo, Ann Ho
Chindo, Sulaiman
spellingShingle Bugaje, Idris Bashir
Abd Rahman, Azmawani
Said, Rusmawati
Jo, Ann Ho
Chindo, Sulaiman
The effect of formal and informal institutions on poverty reduction
author_facet Bugaje, Idris Bashir
Abd Rahman, Azmawani
Said, Rusmawati
Jo, Ann Ho
Chindo, Sulaiman
author_sort Bugaje, Idris Bashir
title The effect of formal and informal institutions on poverty reduction
title_short The effect of formal and informal institutions on poverty reduction
title_full The effect of formal and informal institutions on poverty reduction
title_fullStr The effect of formal and informal institutions on poverty reduction
title_full_unstemmed The effect of formal and informal institutions on poverty reduction
title_sort effect of formal and informal institutions on poverty reduction
publisher Exeliq Publishing
publishDate 2018
url http://psasir.upm.edu.my/id/eprint/74144/
https://exeliqpublishing.com/2018/04/08/the-effect-of-formal-and-informal-institutions-on-poverty-reduction/
_version_ 1755873888907034624
score 13.211869

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