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Institutional Change and Economic Development

Institutional Change and Economic Development

Ha-Joon Chang | Deepak Nayyar


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‘Institutional Change and Economic Development’ discusses not just theoretical issues but a diverse range of real-life institutions – political, bureaucratic, fiscal, financial, corporate, legal, social and industrial – in the context of dozens of countries across time and space, spanning Britain, Switzerland and the USA in the past to Botswana, Brazil, and China today.

'This book takes us to a new level of analysis, with a very thorough understanding of the history and political economy of institution-building. Along the way it demolishes much of the conventional wisdom, and sets a new standard that all future research on institutions must match.' —Tony Addison, Executive Director of the Brooks World Poverty Institute, University of Manchester

 The issue of institutional development has come to prominence during the last decade or so. During this period even the IMF and the World Bank, which used to treat institutions as mere ‘details’, have come to emphasise the role of institutions in economic development. However, there are still some important gaps that need to be filled before we can say that we have a good grip on the issue of institutions and economic development, both theoretically and at the policy level. This book is an attempt to fill these gaps. Recognizing the complexity of the issues involved, this book draws together contributions from scholars in economics, history, political science, sociology, public administration and business administration. These experts discuss not only theoretical issues but also a diverse range of real-life institutions – political, bureaucratic, fiscal, financial, corporate, legal, social and industrial – in the context of dozens of countries across time and space – from Britain, Switzerland and the USA to today’s Botswana, Brazil and China. The contributors show that there is no simple formula for institutional development. Instead, real-life examples of institutional development which has been achieved through a mixture of deliberate imitation of foreign institutions and local institutional innovations are discussed and studied. While arguing there is no set formula for institutional development, this book will assist developing countries to improve their institutions by providing sophisticated theoretical discussions and helpful policy ideas based on real-life cases.

'Just when the institutionalist approach to economic development is at risk of seeming like a ‘black box’ for tautological non-explanations, this volume of richly historically informed and nuanced studies will restore confidence in the value, if not superiority, of this approach to the political economy of development.' —Jomo K. S., Assistant Secretary-General for Economic Development, United Nations

Ha-Joon Chang is Reader in the Political Economy of Development at the Faculty of Economics, University of Cambridge, UK.

Table of Contents

Section Title Page Action Price
Front Matter 1
Half Title 1
Title 3
Copyright 4
Advance Reviews 5
Table of Contents 7
List of Figures 9
List of Tables 11
List of Contributors 13
Foreword by Deepak Nayyar 17
Acknowledgements 21
Main Matter 23
Chapter 1: Institutional change and economic development: An introduction, by Ha-Joon Chang 23
Notes 36
References 36
Part I: Theoretical Overview 37
Chapter 2: Understanding the relationship between institutions and economic development - Some key theoretical issues, by Ha-Joon Chang 39
Notes 53
References 54
Chapter 3: Extending the 'institutional' turn: Property, politics, and development trajectories, by Peter B. Evans 57
Notes 72
References 72
Chapter 4: Institutionalism ancient, old, and new: A historical perspective on institutions and uneven development, by Erik S. Reinert 75
Notes 92
References 92
Part II: Evolution of Particular Institutions 95
Chapter 5: Modern bureaucracy, by John Toye 97
Notes 114
References 115
Chapter 6: Central banks as agents of economic development, by Gerald Epstein 117
Notes 133
References 134
Chapter 7: Corporate governance, innovative enterprise, and economic development, by William Lazonick 137
Notes 154
References 154
Chapter 8: The political economy of taxation and tax reform in developing countries, by Jonathan di John 157
Notes 174
References 176
Chapter 9: The rule of law, legal traditions, and economic growth: The East Asian example, by Meredith Jung-En Woo 179
References 195
Part III: Country Experiences 197
Chapter 10: State formation and the construction of institutions for the first industrial nation, by Patrick Karl O'Brien 199
Notes 217
References 217
Chapter 11: The role of federalism in developing the US during nineteenth-century globalization, by Eric Rauchway 221
Notes 236
References 237
Chapter 12: Institutions and economic growth: The successful experience of Switzerland, 1870-1950, by Thomas David and Andre Mach 241
Notes 257
References 258
Chapter 13: The rise and halt of economic development in Brazil, 1945-2004: Industrial catching-up, institutional innovation, and financial fragility, by Leonardo Burlamaqui, Jose A. P. de Souza, and Nelson H. Barbosa-Filho 261
Notes 278
References 280
Chapter 14: Rethinking import-substituting industrialization: Development strategies and institutions in Taiwan and China, by Tianbiao Zhu 283
Notes 298
References 299
Chapter 15: Developmental nationalism and economic performance in Africa: The case of three 'successful' African economies, by Julius Kiiza 303
Notes 320
References 320
End Matter 323
Index 323