Institutional Quality, Knightian Uncertainty, and Insurability : A Cross-Country Analysis /

Knightian uncertainty (ambiguity) implies presence of uninsurable risks. Institutional quality may be a good indicator of Knightian uncertainty. This paper correlates non-life insurance penetration in 70 countries with income level, financial sector depth, country risk, a measure of cost of insuranc...

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Bibliographic Details
Main Author: Erbas, S.
Other Authors: Sayers, Chera
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2006.
Series:IMF Working Papers; Working Paper ; No. 2006/179
Subjects:
Online Access:Full text available on IMF
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520 3 |a Knightian uncertainty (ambiguity) implies presence of uninsurable risks. Institutional quality may be a good indicator of Knightian uncertainty. This paper correlates non-life insurance penetration in 70 countries with income level, financial sector depth, country risk, a measure of cost of insurance, and the World Bank governance indexes. We find that institutional quality-transparency-uncertainty nexus is the dominant determinant of insurability across countries, surpassing the explanatory power of income level. Institutional quality, as it reflects on the level of uncertainty, is the deeper determinant of insurability. Insurability is lower when governance is weaker. 
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650 7 |a Insurability  |2 imf 
650 7 |a Insurance Coverage  |2 imf 
650 7 |a Life Insurance  |2 imf 
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