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Political Economy of Institutions and Development: The Importance of Being Inclusive. Reflection on "Why Nations Fail" by D. Acemoglu and J. Robinson. Part I. Institutions and Economic Development. Institutional Choice

Author

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  • Natkhov, T.

    (Brown University, USA)

  • Polishchuk, L.

    (National Research University Higher School of Economics, Moscow, Russia)

Abstract

We discuss the evolving views on institutions and development in modern political economy, and in particular the contribution to the field by D. Acemoglu and J. Robinson, explaining root causes of successes and failures in economic development. The focus of discussion is on inclusive and extractive institutional regimes - the former sustain economic growth, whereas the latter enable elites to expropriate the rest of society. Although extractive institutions are inefficient and obstruct development, they are preferred by elites and hence can be reproduced over long periods of time in vicious circles of economic and political inequality. In Part II of the paper (to be published in the next issue of the Journal) we apply the above concepts and views to the post-Soviet period of the Russian history, where the market reforms of the early 1990s became a "critical juncture" which has shaped Russia's institutional regime for decades to come.

Suggested Citation

  • Natkhov, T. & Polishchuk, L., 2017. "Political Economy of Institutions and Development: The Importance of Being Inclusive. Reflection on "Why Nations Fail" by D. Acemoglu and J. Robinson. Part I. Institutions and Economic Devel," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 12-38.
  • Handle: RePEc:nea:journl:y:2017:i:34:p:12-38
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    Cited by:

    1. Fraymovich, D. Yu. & Gundorova, M. A., 2019. "Institutional conditions for socio-economic development in Russian regions," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 5(1), pages 5-12.
    2. Pavel Aleksandrovich Minakir, 2019. "Far Eastern Institutional Novations: Imitation of a New Stage," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 7-17.
    3. Oana-Ramona SOCOLIUC (GURIȚĂ) & Andreea-Oana IACOBUȚĂ-MIHĂIȚĂ & Elena CIORTESCU, 2021. "Private property - the inclusive institution which shaped dissimilar economic dynamics. Evidence from the Czech Republic and Romania," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 12, pages 213-243, December.
    4. I. P. Glazyrina & L. M. Faleychik & A. A. Faleychik, 2021. "Institutional Policy and the Role of Foreign Direct Investment in the Far East of Russia," Regional Research of Russia, Springer, vol. 11(4), pages 625-637, October.

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    More about this item

    Keywords

    inclusive and extractive institutions; critical junctures; political economy of institutions and development;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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