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

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Dani Rodrik

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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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Handle: RePEc:nbr:nberwo:7540

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O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General

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  1. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank. [Downloadable!]
  2. Robert J. Barro, 1996. "Determinants of Economic Growth: A Cross-Country Empirical Study," NBER Working Papers 5698, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Aaron Tornell & Philip R. Lane, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. Lau, Lawrence J & Qian, Yingyi & Roland, Gérard, 1998. "Reform Without Losers: An Interpretation of China's Dual-Track Approach to Transition," CEPR Discussion Papers 1798, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. 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. [Downloadable!] (restricted)
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