Good Governance, Welfare, and Transformation
Market conforming institutions are a precondition for a thriving and stable economy. This is the upshot of the Washington consensus or, of somewhat earlier origin, the "Eucken hypothesis" Another hypothesis of Eucken has it that market conforming institutions are the product of a strong state. However, more general and more important than the strong state is good governance. In this paper I refer to it as the "Lorenzetti hypothesis". The paper tries to figure out the mechanisms by which good governance and economic order influence economic outcome. Then the two hypotheses are tested for two aspects of economic outcome: productivity as measured by GNP per capita over a wide range of countries and transformation success as measured by GNP growth over the European transformation countries. The tests confirm the theoretical expectation that good governance is more important than good order
Volume (Year): 1 (2004)
Issue (Month): 1 (June)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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6564, National Bureau of Economic Research, Inc.
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20059, University Library of Munich, Germany.
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MIT Press Books,
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