Amin, MohammadMattoo, Aaditya2012-06-262012-06-262006-10https://hdl.handle.net/10986/9014Recent empirical research has focused on the role of institutions in overall economic performance. This paper examines the impact of institutions on the relative performance of the service sector. Through cross-country level and growth regressions it establishes the following stylized fact: countries with better institutions have relatively larger and more dynamic service sectors. It suggests that regulatory and contract enforcing institutions play a key role in the development of service sectors because these sectors enter into a more complex web of transactions with the rest of the economy and are more prone to market failure due to asymmetric information.en-USCC BY 3.0 IGOADVERSE EFFECTADVERSE EFFECTSASYMMETRIC INFORMATIONBENCHMARKCENTRAL PLANNINGCIVIL LAWCOMMON LAWCOMPARATIVE ADVANTAGECORRUPTIONDEVELOPMENT ECONOMICSDEVELOPMENT STRATEGYECONOMIC LIFEECONOMIC OUTCOMESECONOMIC PERFORMANCEECONOMIC STRUCTUREECONOMIC THEORIESECONOMICS RESEARCHELASTICITYENDOGENOUS VARIABLESGDPGDP PER CAPITAGINI COEFFICIENTGROWTH RATEHUMAN CAPITALINCOME ELASTICITY OF DEMANDLABOR MARKETLAWSLEGAL FRAMEWORKLEGAL FRAMEWORKSLEGAL SYSTEMSPROPERTY RIGHTSREAL INCOMERULE OF LAWSOLDIERSTELECOMMUNICATIONSVALUE ADDEDWorld Bankhttps://doi.org/10.1596/1813-9450-4032