This book is a survey of the field of development studies from a political economy perspective. It first reviews the academic literature on development and highlights the fundamental importance of institutions and social values, over and above other alternative theories, as determinants in long-run development. In this context, the book draws from the works of Nobel Laureates Douglass North, F.A. Hayek and Elinor Ostrom, and argues that the ingredients of property rights, the rule of law, and market freedoms are essential in generating socio-economic progress.
Successful reforms however are not simply a function of constructing formal institutions, but must cohere with the social values, norms, and cultural commitments of local communities. It is in this spirit that the book theorises on the oft-neglected role that political entrepreneurs play in driving endogenous institutional change. Specifically, this book integrates the theoretical discussion on market-driven development with a range of case studies from around the world, featuring the bottom-up efforts of local change agents to pursue institutional reforms and changes in social opinion.
Author(s): Bryan Cheang, Tom G. Palmer
Series: Classroom Companion: Economics
Publisher: Springer
Year: 2023
Language: English
Pages: 209
City: Singapore
Acknowledgements
Praise for Institutions and Economic Development
Contents
1 Development and Progress
Why Care About Development?
Wealth Liberates People
But Prosperity is not Inevitable
Explaining Development
Gains from Trade
Gains from Innovation
Entrepreneurship the Driving Force
Institutions and Ideas Matter
Economic Theories
Geography and Culture
The Great Enrichment Tells Us That Prosperity is Possible
Access to Essential Goods
On Sustainability
So What?
Liberal Political Economy and Institutional Entrepreneurs
Structure of the Book
Discussion Questions
References
2 A Brief History of Modern Development Thinking
Classical Development Economics
Paul Rosenstein-Rodan (1902–1985)
Ragnar Nurkse (1907–1959)
Albert Hirschman (1915–2012)
Arthur Lewis (1915–1991)
Walt Rostow (1916–2003)
Contemporary Development Economics
Neoclassical Growth Theory and Robert Solow
Endogenous Growth Theory, Human Capital and Paul Romer
Jeffrey Sachs on Geography and Foreign Aid
Amartya Sen on Freedom and Capabilities
The ‘Rebels’
Peter Bauer
Ha-Joon Chang
Discussion Questions
References
3 Markets and Development
Markets and the Benefits of Economic Freedom
Market Reforms from the Bottom-Up
Liberating Enterprise in India
Low-Tax Growth in Madrid, Spain
Pro-competition Reforms in Philippines
Trade and Food Security in Indonesia
Tax and Migration Reforms in Lithuania
Market Failure Theory
Market Process Theory
Dependency Theory
Conclusion
Discussion Questions
References
4 Institutions and Market-Driven Development
Rise (or Resurgence) of Institutional Economics
New or Not?
Defining Institutions
Central Institutional Question and Liberal Political Economy
Property Rights
Why Property Rights?
Rule of Law
Neglect of Institutions
Failure of Washington Consensus
Failure of Foreign Aid
Conclusion
Discussion Questions
References
5 Culture, Development and Liberal Values
Culture: Deterministic or Fluid?
Progress-Prone Values
Lawrence Harrison on Jewish and Chinese Success
Markets and Liberal Values
Individualism and Freedom
Cultural Entrepreneurship: Good or Bad?
Cultural Entrepreneurship as a Key Driver of Change
Historical Migration and Conquest
Liberal Cultural Change in Contemporary Africa
Conclusion
Discussion Questions
References
6 State Capacity and the Political Infrastructure of Development
Why State Capacity?
Understanding State Capacity
Determinants of State Capacity
Deconstructing State Capacity
Private Governance
Co-production and State-Society Collaboration
State Constraints
Ordoliberalism, State Capacity and German Economic Recovery
Political Structures, Regime Type and Democracy
On Authoritarian Development: The Cases of Singapore and China
Evaluating the ‘East Asian Challenge’
Polycentric Governance and Freedom
Discussion Questions
References
7 Conclusion—Humane Liberalism, Bottom-Up Change and Institutional Entrepreneurship
Humane Liberalism
Global Applications
Necessary but Imperfect
Institutional Entrepreneurship and Social Change
Elinor Ostrom and Bottom-Up Change
CBOs and Institutional Change
Is Institutional Change (Always) Liberal?
Discussion Questions
References
