IESET.
Hypotheses·institutional quality·nordic_outcome_persistence_decomposition_v2

The v1 decomposition (three channels: WGI gov effectiveness, WGI rule of law, IMF debt/GDP) left 98% of the Nordic-vs-Southern-Europe log GDP/capita gap unexplained.

v2 tests whether that residual is substantially explained by five additional cross-sectionally-measured channels that discriminate Nordic from Southern European economies over 1996-2023: control of corruption, regulatory quality, fiscal net lending (surplus vs deficit flow), current account balance, and trade openness. The v2 hypothesis predicts that expanding the channel set absorbs most of the v1 residual on the primary outcome.

PARTIALengine/runs/nordic_outcome_persistence_decomposition_v2

PARTIAL — coef=-0.1578, p=0.211 (above α=0.1); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When countries open more of the economy to trade and competition, do people end up with better long-run income or productivity outcomes?

plain answer

The evidence is suggestive but not decisive. coef=-0.1578, p=0.211 (above α=0.1); direction inconclusive

why it matters

This matters because institutional quality claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 10 country or place units from 1996 to 2023, using a panel fe decomposition design, with fixed effects for year.

what was measured
Possible pathway
  • Basic government quality
  • Rule of law
What we checked
  • Income per capita cost-of-living adjusted constant
  • Inequality disposable income
  • Unemployment rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/nordic_outcome_persistence_decomposition_v2
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Who has skin in the game — schools predicting on this

17 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if MIXEDpartial/no-callChicago School Monetarismwins if MIXEDpartial/no-callClassical Liberalwins if MIXEDpartial/no-callDegrowth / Ecological Macroeconomicswins if MIXEDpartial/no-callDemocratic Socialism (Bernsteinian revisionism + modern)wins if SUPPORTEDpartial/no-callStructuralist / Developmentalistwins if SUPPORTEDpartial/no-callEco-Socialism / Red-Greenwins if MIXEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if SUPPORTEDpartial/no-callNew Institutional Economicswins if SUPPORTEDpartial/no-callMarket Socialism (Lange-Lerner tradition)wins if SUPPORTEDpartial/no-callMarxian Political Economywins if MIXEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if MIXEDpartial/no-callModern Monetary Theorywins if MIXEDpartial/no-callNew Keynesian (mainstream synthesis)wins if SUPPORTEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callPost-Keynesianwins if SUPPORTEDpartial/no-callSocial Democraticwins if SUPPORTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:53:23Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

The v1 decomposition (three channels: WGI gov effectiveness, WGI rule of law, IMF debt/GDP) left 98% of the Nordic-vs-Southern-Europe log GDP/capita gap unexplained. v2 tests whether that residual is substantially explained by five additional cross-sectionally-measured channels that discriminate Nordic from Southern European economies over 1996-2023: control of corruption, regulatory quality, fiscal net lending (surplus vs deficit flow), current account balance, and trade openness. The v2 hypothesis predicts that expanding the channel set absorbs most of the v1 residual on the primary outcome.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if the Nordic-dummy coefficient after including the eight decomposition channels (v1 three + v2 five) plus two controls and year fixed effects remains greater than 30% of the baseline Nordic-dummy coefficient on the primary outcome (log GDP per capita PPP). Secondary thresholds: residual_share(gini) ≤ 0.50, residual_share(unemployment) ≤ 0.50. All three must hold for v2 support. Additional falsifier: if v2's residual_share(log_gdp_pc_ppp) is not materially lower than v1's 0.98 (say, within 0.10), v2 is refuted as a specification- expansion explanation — the residual survives channel expansion and the story is not omitted-variable bias but rather a structural limitation of cross-sectional decomposition on this sample.

formal test & threshold
test:      nordic_dummy_residual_share_across_outcomes_v2
threshold: residual_share(gdp_pc_ppp)  <= 0.30  AND residual_share(gini)        <= 0.50  AND residual_share(unemployment) <= 0.50 AND residual_share(gdp_pc_ppp) materially below v1's 0.976 (difference ≥ 0.10)

Method

Template
panel_fe_decomposition
Fixed effects
year
Clustering
country
Sample
10 countries · 1996 – 2023
Evidence type
causal

PanelOLS with time effects, cluster-robust SEs by country. Country FE deliberately excluded for the same reason as v1: they would absorb the time-invariant Nordic dummy, making the hypothesis untestable at the cross-sectional level. Baseline: nordic_dummy + year FE. Full: nordic_dummy + 8 channels + 2 controls + year FE. Design limitation acknowledged up-front: this is a cross-sectional snapshot-style decomposition like v1. It does NOT test the trajectory claim (Bildt 1991, Schröder 2003, Nyrup 1994, Norway SWF 2001 → outcome improvements) — that's a separate v3 hypothesis requiring within-country decomposition and movement-level DiD. v2 answers the narrower question: 'were the v1 channels just the wrong set?' If v2 absorbs the residual, the answer is yes. If v2 still leaves a large residual, the decomposition framing is exhausted and the story is trajectory-shaped or unmeasurably- cultural, not cross-sectional.

Data

VariableSourceTransform
gdp_per_capita_ppp_constant
outcome
world_bank_wdi:NY.GDP.PCAP.PP.KDtier 2
log
gini_disposable_income
outcome
world_bank_wdi:SI.POV.GINItier 2
level
unemployment_rate
outcome
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level
government_effectiveness
channel
wgi:GOV_WGI_GE.ESTtier 4
level
rule_of_law
channel
wgi:GOV_WGI_RL.ESTtier 4
level
debt_to_gdp_imf
channel
imf:GGXWDG_NGDPtier 2
level
control_of_corruption
channel
wgi:GOV_WGI_CC.ESTtier 4
level
regulatory_quality
channel
wgi:GOV_WGI_RQ.ESTtier 4
level
fiscal_net_lending_gdp
channel
imf:GGXCNL_NGDPtier 2
level
current_account_gdp
channel
imf:BCA_NGDPDtier 2
level
trade_openness
channel
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
log_population
control
world_bank_wdi:SP.POP.TOTLtier 2
log
urbanisation
control
world_bank_wdi:SP.URB.TOTL.IN.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — nordic_outcome_persistence_decomposition_v2

Verdict: PARTIAL — coef=-0.1578, p=0.211 (above α=0.1); direction inconclusive

Pre-registration

  • Claim: The v1 decomposition (three channels: WGI gov effectiveness, WGI rule of law, IMF debt/GDP) left 98% of the Nordic-vs-Southern-Europe log GDP/capita gap unexplained. v2 tests whether that residual is substantially explained by five additional cross-sectionally-measured channels that discriminate Nordic from Southern European economies over 1996-2023: control of corruption, regulatory quality, fiscal net lending (surplus vs deficit flow), current account balance, and trade openness. The v2 hypothesis predicts that expanding the channel set absorbs most of the v1 residual on the primary outcome.
  • Falsification rule: Not supported if the Nordic-dummy coefficient after including the eight decomposition channels (v1 three + v2 five) plus two controls and year fixed effects remains greater than 30% of the baseline Nordic-dummy coefficient on the primary outcome (log GDP per capita PPP). Secondary thresholds: residual_share(gini) ≤ 0.50, residual_share(unemployment) ≤ 0.50. All three must hold for v2 support. Additional falsifier: if v2's residual_share(log_gdp_pc_ppp) is not materially lower than v1's 0.98 (say, within 0.10), v2 is refuted as a specification- expansion explanation — the residual survives channel expansion and the story is not omitted-variable bias but rather a structural limitation of cross-sectional decomposition on this sample.
  • Falsification test: nordic_dummy_residual_share_across_outcomes_v2

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.1578
  • Std error: 0.1256
  • p-value: 0.211
  • Observations: 200, countries: 8
  • Within R²: -1.48
  • Fixed effects: entity=False, time=True
  • Clustering: country

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.PP.KD → gdp_per_capita_ppp_constant (outcome, publisher=world_bank_wdi, n=8325)
  • world_bank_wdi:SI.POV.GINI → gini_disposable_income (outcome, publisher=world_bank_wdi, n=2430)
  • world_bank_wdi:SL.UEM.TOTL.ZS → unemployment_rate (outcome, publisher=world_bank_wdi, n=6874)
  • wgi:GOV_WGI_GE.EST → government_effectiveness (decomposition_channels, publisher=wgi, n=5168)
  • wgi:GOV_WGI_RL.EST → rule_of_law (decomposition_channels, publisher=wgi, n=5296)
  • imf:GGXWDG_NGDP → debt_to_gdp_imf (decomposition_channels, publisher=imf, n=8113)
  • wgi:GOV_WGI_CC.EST → control_of_corruption (decomposition_channels, publisher=wgi, n=5201)
  • wgi:GOV_WGI_RQ.EST → regulatory_quality (decomposition_channels, publisher=wgi, n=5169)
  • imf:GGXCNL_NGDP → fiscal_net_lending_gdp (decomposition_channels, publisher=imf, n=8848)
  • imf:BCA_NGDPD → current_account_gdp (decomposition_channels, publisher=imf, n=10556)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (decomposition_channels, publisher=world_bank_wdi, n=10714)
  • world_bank_wdi:SP.POP.TOTL → log_population (controls, publisher=world_bank_wdi, n=14447)
  • world_bank_wdi:SP.URB.TOTL.IN.ZS → urbanisation (controls, publisher=world_bank_wdi, n=16965)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:23+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

v2 deliberately does NOT address the trajectory / movement-level critique from the v1 discussion — that's a structural-model change, not a channel addition. v3 will be a within-country panel with country FE + interactions on movement-reform-period indicators, requiring movement YAMLs for Bildt 1991, Nyrup 1994, Norwegian SWF 2001, Schröder 2003-05, Mitterrand 1981, Greek fiscal-dominance 2000s, Italian stagnation 1990s-2010s, etc. v3 depends on movements/*.yaml content landing first.

Authored framework. Read the transparency note.