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Institutions, Institutional Change, and Economic Performance
Douglass C. North,John Alt +1 more
TLDR
In this article, the authors examine the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time.Abstract:
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)read more
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Resilience: New Utopia or New Tyranny? Reflection about the Potentials and Limits of the Concept of Resilience in Relation to Vulnerability Reduction Programmes
TL;DR: In this article, the advantages and limits of resilience are assessed in a critical manner, and it is shown that resilience is not a pro-poor concept, and the objective of poverty reduction cannot simply be substituted by resilience building.
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Do Institutions Cause Growth
Edward L. Glaeser,Edward L. Glaeser,Edward L. Glaeser,Rafael La Porta,Rafael La Porta,Florencio Lopez de Silanes,Florencio Lopez de Silanes,Andrei Shleifer,Andrei Shleifer +8 more
TL;DR: The authors showed that most indicators of institutional quality used to establish the proposition that institutions cause economic growth are conceptually unsuitable for that purpose and also found that some of the instrumental variable techniques used in the literature are flawed.
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Smallholder participation in contract farming: Comparative evidence from five countries
Christopher B. Barrett,Maren E. Bachke,Marc F. Bellemare,Hope Michelson,Sudha Narayanan,Thomas F. Walker +5 more
TL;DR: This article developed a conceptual framework with which to study contracting between small-holders and a commodity-processing firm and synthesize results from empirical studies of contract farming arrangements in five countries (Ghana, India, Madagascar, Mozambique, and Nicaragua).
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Institutions and the OLI paradigm of the multinational enterprise
TL;DR: In this article, the authors introduce a theoretical framework that draws substantially on the work of Douglass North, and examine how an institutional dimension can be incorporated into the three components of the OLI paradigm.
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The Politics of Path Dependency: Political Conflict in Historical Institutionalism
TL;DR: In this article, the authors argue for the importance of political conflict as a means of initiating change in an institutionalist framework, arguing that conflict over ideas and the underlying assumptions of policy is important for motivating change.