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\"The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development

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  • ROUGIER Eric

Abstract

This paper surveys the growing empirical neo-institutional literature dealing with economic development and shows that it has essentially developed a one-dimensional perspective on institutions and their effect on economic development that has overlooked the fact that economic effects of institutions actually tend to cluster. The paper introduces an original framework to analyze institutional systems and the clustered effect of institutions. Drawing on this framework and on recent empirical studies having attempted to unbundle or re-bundle institutional systems along these lines, it is argued that understanding how institutions cluster their impact on economic outcomes imposes to give more attention to institutional systems, notably by (1) unbundling the specific economic effects of specialized institutions from those of such general purpose institutions as rule of law or property right enforcement, and by (2) re-bundling these effects so that de jure and de facto complementarities and hierarchies can be identified between specialized and general purpose institutions.

Suggested Citation

  • ROUGIER Eric, 2015. "\"The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development," Cahiers du GREThA 2015-12, Groupe de Recherche en Economie Théorique et Appliquée.
  • Handle: RePEc:grt:wpegrt:2015-12
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    File URL: http://cahiersdugretha.u-bordeaux4.fr/2015/2015-12.pdf
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    Keywords

    Economic institutions; Political institutions; Economic development; Institutional complementarities; Institutional hierarchies; Institutional systems; Institutional clusters;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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