This paper analyzes the e ect of the average level of intelligence on different measures of the quality of institutions, using a 2006 cross-sectional sample of 113 countries. The results show that average IQ positively affects all the measures of institutional quality considered in our study, namely government effi ciency, regulatory quality, rule of law, political stability and voice and accountability. The positive effect of intelligence is robust to controlling for other determinants of institutional quality. It follows that countries with higher IQ levels enjoy institutions of better quality than countries with low levels of IQ. This fi nding should by no means be interpreted as evidence that there exist some countries with more intelligent populations that build better institutions and some other countries with less intelligent populations that build poor institutions. What our finding points out to is the fact that a country’s level of the understanding of the rules and principles that govern the institutions and the degree of cooperation of its human capital withinnational institutions is important for institutional quality.
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