What does political economy tell us about economic development - and vice versa?
AbstractThe author reviews how three pillars of political economy-collective action, institutions, and political market imperfections-help us answer the question: Why do some countries develop and others do not? Each makes tremendous advances in our understanding of who wins and who loses in government decision making, generally, but only a subset of this literature helps us answer the question. The study of political market imperfections strongly suggests that the lack of credibility of pre-electoral political promises and incomplete voter information are especially robust in explaining development outcomes. From the institutional literature, the most powerful explanation of contrasting development outcomes links political checks and balances to the credibility of government commitments.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3250.
Date of creation: 01 Mar 2004
Date of revision:
Parliamentary Government; Decentralization; National Governance; Environmental Economics&Policies; Economic Theory&Research; National Governance; Economic Theory&Research; Parliamentary Government; Environmental Economics&Policies; Governance Indicators;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-16 (All new papers)
- NEP-DEV-2004-08-16 (Development)
- NEP-HPE-2004-09-12 (History & Philosophy of Economics)
- NEP-PKE-2004-09-12 (Post Keynesian Economics)
- NEP-POL-2004-09-12 (Positive Political Economics)
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