Institutions and Convergence (preliminary version)
Institutional variables are the most important factor explaining real convergence. But what are institutions? This paper examines the relationship between institutions and policies, institutions and organisations, and formal and informal institutions. The concept of propelling and stabilizing institutions is introduced and used to explain differences in real convergence. Finally, issues of institutional changes are analysed based on an analytical framework which consists of initial conditions and two types of forces: collectivist and liberal. I first briefly present some basic facts about economic convergence and divergence over the last 200 years. I then discuss how the problem of long-run growth has been treated in the economic literature. Section 3 attempts to classify the concept of institutions – the key explanatory variable in the deeper analysis of the relative pace of development. In Section 4 I describe two types of institutions, propelling and stabilizing, and their relationship to economic growth. Based on previous sections and the empirical literature on convergence, I then formulate some broad propositions concerning why countries converge or diverge (Section 5). The explanation runs in terms of institutional variables. In Section 6 I go one level deeper and ask what explains institutional change
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Aleja Jana Pawla II, 61, 01-031 Warsaw|
Phone: +48 22 206 29 00
Fax: +48 22 206 29 01
Web page: http://www.case-research.eu/
More information through EDIRC
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.:
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Gary S. Becker, 1984.
"Public Policies, Pressure Groups, and Dead Weight Costs,"
University of Chicago - George G. Stigler Center for Study of Economy and State
35, Chicago - Center for Study of Economy and State.
- Becker, Gary S., 1985. "Public policies, pressure groups, and dead weight costs," Journal of Public Economics, Elsevier, vol. 28(3), pages 329-347, December.
- Stanley Fischer, 1991. "Growth, Macroeconomics, and Development," NBER Working Papers 3702, National Bureau of Economic Research, Inc.
- Douglass C North & John Joseph Wallis & Barry R. Weingast, 2006. "A Conceptual Framework for Interpreting Recorded Human History," NBER Working Papers 12795, National Bureau of Economic Research, Inc.
- Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
- Hnatkovska, Viktoria & Loayza, Norman, 2004. "Volatility and growth," Policy Research Working Paper Series 3184, The World Bank.
- Stanley Fischer, 1991. "Growth, Macroeconomics, and Development," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 329-379 National Bureau of Economic Research, Inc.
- Fischer, S., 1991. "Growth, Macroeconomics, and Development," Working papers 580, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jeffrey Sachs & Andrew Warner, 1995.
"Economic Reform and the Progress of Global Integration,"
Harvard Institute of Economic Research Working Papers
1733, Harvard - Institute of Economic Research.
- Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
- Dani Rodrik, 2003.
NBER Working Papers
10050, National Bureau of Economic Research, Inc.
- John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
- Quibria, M.G., 2002. "Growth and Poverty: Lessons from the East Asian Miracle Revisited," MPRA Paper 2638, University Library of Munich, Germany.
- North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
- Stefano Scarpetta & Philip Hemmings & Thierry Tressel & Jaejoon Woo, 2002. "The Role of Policy and Institutions for Productivity and Firm Dynamics: Evidence from Micro and Industry Data," OECD Economics Department Working Papers 329, OECD Publishing.
- Willi Leibfritz & John Thornton & Alexandra Bibbee, 1997. "Taxation and Economic Performance," OECD Economics Department Working Papers 176, OECD Publishing.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," Harvard Institute of Economic Research Working Papers 1856, Harvard - Institute of Economic Research.
When requesting a correction, please mention this item's handle: RePEc:sec:cnstan:0342. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Agata Kwiek)
If references are entirely missing, you can add them using this form.