IESET.
Hypotheses·institutional quality·regulatory_predictability_frontier_innovation

Among high-income frontier economies 1990-2020, regulatory predictability — measured by low regulatory-policy volatility, stable tax codes, and low frequency of major rule changes — predicts innovation outcomes (patent quality, R&D productivity, and frontier TFP growth) better than direct public R&D subsidies as a share of GDP.

The pre-registered claim is that, in a horse- race regression, the coefficient on regulatory predictability is larger in absolute t-statistic than the coefficient on public R&D subsidies, and that countries in the top tercile of regulatory predictability show at least 0.25 percentage points higher annual TFP growth and 10% more forward citations per patent than countries in the bottom tercile.

PARTIALengine/runs/regulatory_predictability_frontier_innovation

PARTIAL — coef=-0.001301, p=0.926 (above α=0.05); 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

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. coef=-0.001301, p=0.926 (above α=0.05); 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 31 country or place units from 1990 to 2020, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Regulatory predictability index
  • Public rd subsidies share income
What we checked
  • Productivity growth
  • Patent forward citations per patent
  • Rd productivity
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/regulatory_predictability_frontier_innovation
1007550250199020052020USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show tfp_growth across 31 sampled countries over 1990–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for regulatory_predictability_frontier_innovation. Published chart will be generated from engine/runs/regulatory_predictability_frontier_innovation/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:53:24Z
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.

Among high-income frontier economies 1990-2020, regulatory predictability — measured by low regulatory-policy volatility, stable tax codes, and low frequency of major rule changes — predicts innovation outcomes (patent quality, R&D productivity, and frontier TFP growth) better than direct public R&D subsidies as a share of GDP. The pre-registered claim is that, in a horse- race regression, the coefficient on regulatory predictability is larger in absolute t-statistic than the coefficient on public R&D subsidies, and that countries in the top tercile of regulatory predictability show at least 0.25 percentage points higher annual TFP growth and 10% more forward citations per patent than countries in the bottom tercile.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the regulatory-predictability coefficient is not positive and significant at p<0.05 on TFP growth or patent citations, OR (b) in the horse-race the public-R&D coefficient has a larger absolute t-statistic than regulatory predictability, OR (c) the top-tercile vs bottom-tercile TFP growth gap is below 0.15 pp/year. A "public R&D drives innovation" reading wins cleanly if (b) holds.

formal test & threshold
test:      panel_fe_horserace_regulatory_predictability_vs_public_rd
threshold: panel_FE_beta(predictability → tfp_growth) > 0 at p<0.05 AND |t_stat(predictability)| > |t_stat(public_rd_subsidies)| in horse-race AND top_tercile_mean_tfp_gap >= 0.25 pp/yr

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
31 countries · 1990 – 2020
Evidence type
associational

Panel FE horse-race: regulatory predictability and public R&D subsidies entered simultaneously. Primary test: absolute t- statistic comparison. Tercile comparison as robustness. Robustness: exclude US; use only EU-15 sub-sample; use OECD MSTI public R&D measure instead of WDI; alternative predictability measure from V-Dem policy predictability.

Data

VariableSourceTransform
tfp_growth
outcome
pwt:rtfpnatier 3
log_diff
patent_forward_citations_per_patent
outcome
wipo:patent_citationstier 2
level
rd_productivity
outcome
constructed:patents_per_million_rd_dollarstier 5
level
regulatory_predictability_index
treatment
constructed:0.4×fraser_efw:regulatory_stability + 0.3×oecd_gov_regulatory_management + 0.3×tax_code_stabilitytier 5
level
public_rd_subsidies_share_gdp
treatment
world_bank_wdi:GB.XPD.RSDV.GD.ZStier 2
level
fraser_regulatory_stability
treatment
fraser_efw:regulatory_stabilitytier 4
level
log_initial_gdp_pc
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
private_rd_share_gdp
control
oecd:msti_private_rdtier 2
level
human_capital_index
control
pwt:hctier 3
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
product_market_regulation
control
oecd_pmr:pmr_compositetier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — regulatory_predictability_frontier_innovation

Verdict: PARTIAL — coef=-0.001301, p=0.926 (above α=0.05); direction inconclusive

Pre-registration

  • Claim: Among high-income frontier economies 1990-2020, regulatory predictability — measured by low regulatory-policy volatility, stable tax codes, and low frequency of major rule changes — predicts innovation outcomes (patent quality, R&D productivity, and frontier TFP growth) better than direct public R&D subsidies as a share of GDP. The pre-registered claim is that, in a horse- race regression, the coefficient on regulatory predictability is larger in absolute t-statistic than the coefficient on public R&D subsidies, and that countries in the top tercile of regulatory predictability show at least 0.25 percentage points higher annual TFP growth and 10% more forward citations per patent than countries in the bottom tercile.
  • Falsification rule: Not supported if (a) the regulatory-predictability coefficient is not positive and significant at p<0.05 on TFP growth or patent citations, OR (b) in the horse-race the public-R&D coefficient has a larger absolute t-statistic than regulatory predictability, OR (c) the top-tercile vs bottom-tercile TFP growth gap is below 0.15 pp/year. A "public R&D drives innovation" reading wins cleanly if (b) holds.
  • Falsification test: panel_fe_horserace_regulatory_predictability_vs_public_rd

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.001301
  • Std error: 0.01402
  • p-value: 0.926
  • Observations: 748, countries: 26
  • Within R²: 0.672
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • pwt:rtfpna → tfp_growth (outcome, publisher=pwt, n=6407)
  • constructed: 0.4×fraser_efw:regulatory_stability + 0.3×oecd_gov_regulatory_management + 0.3×tax_code_stability → regulatory_predictability_index (treatment, publisher=regulatory_predictability_index, n=961)
  • world_bank_wdi:GB.XPD.RSDV.GD.ZS → public_rd_subsidies_share_gdp (treatment, publisher=world_bank_wdi, n=3140)
  • fraser_efw:regulatory_stability → fraser_regulatory_stability (treatment, publisher=fraser_efw, n=4718)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_initial_gdp_pc (controls, publisher=world_bank_wdi, n=12104)
  • pwt:hc → human_capital_index (controls, publisher=pwt, n=8637)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • oecd_pmr:pmr_composite → product_market_regulation (controls, publisher=oecd_pmr, n=105)

Variables missing data

  • wipo:patent_citations (outcome, name=patent_forward_citations_per_patent) — vintage not on disk
  • constructed: patents_per_million_rd_dollars (outcome, name=rd_productivity) — vintage not on disk
  • oecd:msti_private_rd (controls, name=private_rd_share_gdp) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:24+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

Regulatory predictability is poorly measured compared to R&D spending. Fraser EFW provides the longest series but is opinion-survey-based. OECD regulatory-management indicators are objective but start later and have patchy coverage. This is the primary measurement limitation.

Authored framework. Read the transparency note.