Institutions for High-Quality Growth: What They are and How to Acquire Them

This paper opens with a discussion of the types of institutions that allow markets to perform adequately. While we can identify in broad terms what these are, there is no unique mapping between markets and the non-market institutions that underpin them. The paper emphasizes the importance of local knowledge' and argues that a strategy of institution building must not over-emphasize best-practice blueprint' at the expense of experimentation. Participatory political systems are the most effective ones for processing and aggregating local knowledge. Democracy is a meta-institution for building good institutions. A range of evidence indicates that participatory democracies enable higher-quality growth.

[1]  W. Diebold,et al.  Asia's Next Giant: South Korea and Late Industrialization , 1990 .

[2]  J. Stiglitz,et al.  Modern Economic Theory and Development , 1999 .

[3]  Lant Pritchett,et al.  Civil Liberties, Democracy, and the Performance of Government Projects , 1997 .

[4]  D. Rodrik.  Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses , 1998 .

[5]  D. Rodrik.  Understanding Economic Policy Reform , 2007 .

[6]  R. Barro.  Determinants of Economic Growth: A Cross-Country Empirical Study , 1996 .

[7]  Jonathan R.W. Temple,et al.  Social Capability and Economic Growth , 1998 .

[8]  Michael D. Bordo,et al.  The Defining Moment: The Great Depression and the American Economy in the Twentieth Century , 1997 .

[9]  W. Form,et al.  Embedded Autonomy: States and Industrial Transformation. , 1996 .

[10]  Dani Rodrik,et al.  Why do More Open Economies Have Bigger Governments? , 1996, Journal of Political Economy.

[11]  Douglass C. North,et al.  Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England , 1989, The Journal of Economic History.

[12]  J. Williamson.  The Political Economy of Policy Reform , 1994 .

[13]  Chenggang Xu,et al.  Coordinating Changes in M-form and U-form Organizations , 1999 .

[14]  C. I. Jones,et al.  Why Do Some Countries Produce so Much More Output Per Worker than Others? , 1998 .

[15]  Fernando Limongi,et al.  Political Regimes and Economic Growth , 1993 .

[16]  L. Pritchett.  Understanding patterns of economic growth : searching for hills among plateaus, mountains, and plains , 2000 .

[17]  D. Rodrik.  Democracies Pay Higher Wages , 1998 .

[18]  Raaj Kumar Sah,et al.  Fallibility in Human Organizations and Political Systems , 1991 .

[19]  Stephen F. Knack,et al.  Does Social Capital Have an Economic Payoff? A Cross-Country Investigation , 1997 .

[20]  D. Rodrik.  Getting Interventions Right: How South Korea and Taiwan Grew Rich , 1994 .

[21]  Ted Robert Gurr,et al.  Transitions to Democracy: Tracking Democracy''s Third Wave with the Polity III Data , 1996 .

[22]  Justin Yifu Lin,et al.  Institutions and economic development , 1995 .

[23]  Ricardo Hausmann,et al.  Securing Stability and Growth in a Shock Prone Region: The Policy Challenge for Latin America , 1996 .

[24]  J. Helliwell.  Empirical Linkages Between Democracy and Economic Growth , 1992, British Journal of Political Science.

[25]  P. Lane,et al.  The Voracity Effect , 1999 .

[26]  D. Rodrik.  The New Global Economy and Developing Countries: Making Openness Work , 1999 .

[27]  D. Rodrik.  Why is there so much economic insecurity in Latin America , 2001 .

[28]  R. Unger.  Democracy Realized: The Progressive Alternative , 1998 .

[29]  Stephen F. Knack,et al.  INSTITUTIONS AND ECONOMIC PERFORMANCE: CROSS‐COUNTRY TESTS USING ALTERNATIVE INSTITUTIONAL MEASURES , 1995 .

[30]  Lawrence J. Lau,et al.  Reform without Losers: An Interpretation of China's Dual‐Track Approach to Transition , 2000, Journal of Political Economy.

[31]  Wing Thye Woo,et al.  Understanding china's economic performance , 2001 .

[32]  Douglass C. North,et al.  The Rise of the Western World: A New Economic History , 1973 .

[33]  William F. S. Miles.  The Mauritius Enigma , 1999 .