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Institutions first

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  • BOETTKE, PETER
  • FINK, ALEXANDER

Abstract

Ha-Joon Chang, in his article ‘Institutions and Economic Development: Theory, Policy and History’, raises doubts about the effects of institutions on economic development and questions the positive effects of entirely free markets based on secure private property rights. We respond by stressing that institutions structure the incentives underlying individual action, secure private property rights are indispensable for prosperity, institutions have a first-order effect whereas policies only have a second-order effect, successful institutional change comes from within a society, and, given the status quo of developing countries, first-world institutions are likely not to be available to them.

Suggested Citation

  • Boettke, Peter & Fink, Alexander, 2011. "Institutions first," Journal of Institutional Economics, Cambridge University Press, vol. 7(04), pages 499-504, December.
  • Handle: RePEc:cup:jinsec:v:7:y:2011:i:04:p:499-504_00
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    Cited by:

    1. Roxana Elena Lazar, 2012. "Corruption - An Inhibiting Factor For The Efficient Implementation Of Structural Funds In Romania," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 4(3), pages 356-363, September.
    2. Younis, Fizza, 2015. "Institutional Quality, Foreign Aid and Economic Performance," MPRA Paper 74147, University Library of Munich, Germany.
    3. repec:spr:epolit:v:34:y:2017:i:2:d:10.1007_s40888-017-0063-5 is not listed on IDEAS
    4. Leonid Krasnozhon, 2013. "Institutional stickiness of democracy in post-communist states: Can prevailing culture explain it?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(2), pages 221-237, June.
    5. Paul Lewis, 2005. "Structure, agency and causality in post-revival Austrian economics: tensions and resolutions," Review of Political Economy, Taylor & Francis Journals, vol. 17(2), pages 291-316.
    6. Russell Sobel & Nabamita Dutta & Sanjukta Roy, 2010. "Does cultural diversity increase the rate of entrepreneurship?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(3), pages 269-286, September.
    7. Zhang, Ying & Duysters, Geert, 2010. "Entrepreneurship Development and the Role of Economic Transition in Entrepreneurial Activities in China," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Iizuka, Michiko & Katz, Jorge, 2012. "Globalization and the changing institution for sustainability: The case of the Salmon farming industry in Chile," MERIT Working Papers 063, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Elias Khalil, 1999. "Institutions, Naturalism and Evolution," Review of Political Economy, Taylor & Francis Journals, vol. 11(1), pages 61-81.
    10. Halkos, George E. & Tzeremes, Nickolaos G., 2013. "Carbon dioxide emissions and governance: A nonparametric analysis for the G-20," Energy Economics, Elsevier, vol. 40(C), pages 110-118.
    11. repec:jes:wpaper:y:2012:v:4:p:356-363 is not listed on IDEAS
    12. Smith, Adam & Judge, William & Pezeshkan, Amir & Nair, Anil, 2016. "Institutionalizing entrepreneurial expertise in subsistence economies," Journal of World Business, Elsevier, vol. 51(6), pages 910-922.
    13. Amoros, Jose Ernesto, 2009. "Entrepreneurship and Quality of Institutions," WIDER Working Paper Series 007, World Institute for Development Economic Research (UNU-WIDER).
    14. Wandel Jürgen, 2016. "The Role of Government and Markets in the Strategy “Europe 2020” of the European Union: A Robust Political Economy Analysis," International Journal of Management and Economics, De Gruyter Open, vol. 49(1), pages 7-33, March.

    More about this item

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian

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