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Institutions and Development:A View from Below

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  • Rohini Pande

    () (Economic Growth Center, Yale University)

  • Christopher Udry

    (Economic Growth Center, Yale University)

Abstract

In this paper we argue the case for greater exploitation of synergies between research on specific institutions based on micro-data and the big questions posed by the institutions and growth literature. To date, the macroeconomic literature on institutions and growth has largely relied on cross-country regression evidence. This has provided compelling evidence for a causal link between a cluster of ‘good’ institutions and more rapid long run growth. However, an inability to disentangle the effects of specific institutional channels on growth or to understand the impact of institutional change on growth will limit further progress using a cross-country empirical strategy. We suggest two research programs based on micro-data that have significant potential. The first uses policy-induced variation in specific institutions within countries to understand how these institutions influence economic activity. The second exploits the fact that the incentives provided by a given institutional context often vary with individuals’ economic and political status. This can help us better understand how institutional change arises in response to changing economic and demographic pressures.

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Bibliographic Info

Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 928.

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Length: 59 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:egc:wpaper:928

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Keywords: Institutions; Growth; Cross-Country Regressions;

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References

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Citations

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Cited by:
  1. Berdugo, Binyamin & Meir, Uri, 2009. "Education, Rent Seeking and Growth," MPRA Paper 18369, University Library of Munich, Germany.
  2. Valeria Costantini & Paolo Liberati, 2011. "Technology transfer, institutions and development," Departmental Working Papers of Economics - University 'Roma Tre' 0135, Department of Economics - University Roma Tre.
  3. Alan Martina, 2009. "On the Constrained Contribution of Advances in Medical Knowledge to the Economic Growth of Developing Countries," ANU Working Papers in Economics and Econometrics 2009-504, Australian National University, College of Business and Economics, School of Economics.
  4. Markussen, Thomas & Tarp, Finn & Van Den Broeck, Katleen, 2011. "The Forgotten Property Rights: Evidence on Land Use Rights in Vietnam," World Development, Elsevier, vol. 39(5), pages 839-850, May.
  5. Stephane Straub, 2008. "Infrastructure and Growth in Developing Countries: Recent Advances and Research Challenges," ESE Discussion Papers 179, Edinburgh School of Economics, University of Edinburgh.
  6. Du, Julan & Lu, Yi & Tao, Zhigang, 2008. "Economic institutions and FDI location choice: Evidence from US multinationals in China," Journal of Comparative Economics, Elsevier, vol. 36(3), pages 412-429, September.
  7. Joana Naritomi & Rodrigo R. Soares & Juliano J. Assunção, 2007. "Rent Seeking and the Unveiling of 'De Facto' Institutions: Development and Colonial Heritage within Brazil," NBER Working Papers 13545, National Bureau of Economic Research, Inc.
  8. Casson, Mark C. & Della Giusta, Marina & Kambhampati, Uma S., 2010. "Formal and Informal Institutions and Development," World Development, Elsevier, vol. 38(2), pages 137-141, February.
  9. Maiorano, Federica & Stern, Jon, 2007. "Institutions and Telecommunications Infrastructure in Low and Middle-Income Countries: The Case of Mobile Telephony," Working paper 448, Regulation2point0.
  10. Bruhn, Miriam & Gallego, Francisco A., 2008. "Good, bad, and ugly colonial activities : studying development across the Americas," Policy Research Working Paper Series 4641, The World Bank.
  11. Beck, Thorsten, 2008. "The econometrics of finance and growth," Policy Research Working Paper Series 4608, The World Bank.
  12. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," CEPR Discussion Papers 6273, C.E.P.R. Discussion Papers.
  13. Gareth Austin, 2008. "The 'reversal of fortune' thesis and the compression of history: Perspectives from African and comparative economic history," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(8), pages 996-1027.
  14. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," Working Paper Series rwp07-020, Harvard University, John F. Kennedy School of Government.
  15. Gustavo J Bobonis, 2008. "Endowments, Coercion, and the Historical Containment of Education," Working Papers tecipa-335, University of Toronto, Department of Economics.
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