NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Institutions for High-Quality Growth: What They are and How to Acquire Them

Dani Rodrik

NBER Working Paper No. 7540
Issued in February 2000
NBER Program(s):   EFG

This paper opens with a discussion of the types of institutions that allow markets to perform adequately. While we can identify in broad terms what these are, there is no unique mapping between markets and the non-market institutions that underpin them. The paper emphasizes the importance of local knowledge' and argues that a strategy of institution building must not over-emphasize best-practice blueprint' at the expense of experimentation. Participatory political systems are the most effective ones for processing and aggregating local knowledge. Democracy is a meta-institution for building good institutions. A range of evidence indicates that participatory democracies enable higher-quality growth.

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Document Object Identifier (DOI): 10.3386/w7540

Published: Roy, Kartik C. and Jorn Sideras (eds.) Institutions, Globalisation and Empowerment. Cheltenham, U.K. and Northampton, MA: Elgar, 2006.

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