The Impact of Tariffs and Institutional Quality on Economic Growth in Latin America: A Panel Data Analysis

This paper investigates the relationship between tariffs and economic growth in Latin American countries and how institutional quality may impact this relationship. The study will use data from the World Development Indicators Data Bank. The data used comes from 18 high- or middle-income countries within South America and the Caribbean from the years 2003 to 2023. Results from this study were found using a fixed-effects regression model. The results from this study show that overall, there is a negative correlation between tariffs and economic growth in South America. There is also a positive correlation between institutional quality and economic growth within South America. Following this, this paper explores the relationship between tariffs and economic growth in countries with high institutional quality. It is discovered that within these countries, there is a positive relationship between tariffs and economic growth.