The Role of Institutional Quality in Sustainable Development: Evidence from a Hierarchical Bayesian Approach

Abstract

Purpose: This study evaluates the role of institutional quality in sustainable development and examines differences across country groups.
Design/methodology/approach: A hierarchical Bayesian model is applied to panel data from 72 countries during 2008–2022. Robustness is tested using the Leave-One-Group-Out technique and results are compared with frequentist estimations.
Findings: Institutional quality exerts a positive and consistent impact on sustainable development, with stronger effects observed in less developed countries.
Originality/value: This study provides new empirical evidence and demonstrates the advantages of the hierarchical Bayesian approach in uncovering stratified effects, highlighting institutional improvement as a key policy priority for achieving long-term sustainable development.