INVESTMENT AND INSTITUTIONAL UNCERTAINTY - A COMPARATIVE-STUDY OF DIFFERENT UNCERTAINTY MEASURES

There is ample empirical evidence of a negative relationship between a spects of institutional uncertainty and investment. Most studies, howe ver, do not allow a comparison between different dimensions of such un certainty because they focus on specific indicators, particular region s or different periods. The paper concludes with an evaluation of the quantitative effects of the significant uncertainty indicators on inve stment finding that a lack of rule of law, high corruption, and volati lity in real exchange rate distortions are the most detrimental for in vestment. JEL no. E22, O11