Author

Contributions

  • Sayers, Chera L. - Contributor
  • International Monetary Fund. Office of Executive Directors. - Contributor

Publication

2006 - International Monetary Fund, Office of Executive Directors, Washington, D.C., District of Columbia

Language

English

Word Count

3,250 words, Guess

Page Count

13 pages

Identifiers

  • Better World Books9781451864397
  • Better World Books9781452729961
  • Better World Books9781451988086
  • Open LibraryOL21611027M

Classifications

  • LCCHG8051

Description

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.

Subjects

Series Statement

  • IMF working paper -- WP/06/179

Links

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