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

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  • Dani Rodrik

Abstract

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7540.

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Date of creation: Feb 2000
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Publication status: published as Roy, Kartik C. and Jorn Sideras (eds.) Institutions, Globalisation and Empowerment. Cheltenham, U.K. and Northampton, MA: Elgar, 2006.
Handle: RePEc:nbr:nberwo:7540

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  1. Jonathan Temple & Paul A. Johnson, 1998. "Social Capability And Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 965-990, August.
  2. Lawrence J. Lau & Yingyi Qian & Gerald Roland, 1997. "Reform Without Losers: An Interpretation of China's Dual-Track Approach to Transition," William Davidson Institute Working Papers Series 137, William Davidson Institute at the University of Michigan.
  3. Yifu Lin, Justin & Nugent, Jeffrey B., 1995. "Institutions and economic development," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 38, pages 2301-2370 Elsevier.
  4. Robert J. Barro, 1996. "Determinants of Economic Growth: A Cross-Country Empirical Study," NBER Working Papers 5698, National Bureau of Economic Research, Inc.
  5. Michael D. Bordo & Claudia Goldin & Eugene N. White, 1998. "The Defining Moment: The Great Depression and the American Economy in the Twentieth Century," NBER Books, National Bureau of Economic Research, Inc, number bord98-1, October.
  6. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
  7. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
  8. John Williamson, 1994. "The Political Economy of Policy Reform," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 68.
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