This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two "quasi-natural experiments" in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the world by European powers starting in the fifteenth century. We then develop the basic outline of a framework for thinking about why economic institutions differ across countries. Economic institutions determine the incentives of and the constraints on economic actors, and shape economic outcomes. As such, they are social decisions, chosen for their consequences. Because different groups and individuals typically benefit from different economic institutions, there is generally a conflict over these social choices, ultimately resolved in favor of groups with greater political power. The distribution of political power in society is in turn determined by political institutions and the distribution of resources. Political institutions allocate de jure political power, while groups with greater economic might typically possess greater de facto political power. We therefore view the appropriate theoretical framework as a dynamic one with political institutions and the distribution of resources as the state variables. These variables themselves change over time because prevailing economic institutions affect the distribution of resources, and because groups with de facto political power today strive to change political institutions in order to increase their de jure political power in the future. Economic institutions encouraging economic growth emerge when political institutions allocate power to groups with interests in broad-based property rights enforcement, when they create effective constraints on power-holders, and when there are relatively few rents to be captured by power-holders. We illustrate the assumptions, the workings and the implications of this framework using a number of historical examples.
The paper is an attempt to synthesize and organize the existing literature, this chapter reviews the literature on agricultural innovation, with the threefold goal of (1) sketching the evolution of systemic approaches to agricultural innovation and unravelling the different interpretations;...
Six key themes that emerged from the European Union (EU) funded LEARNing project designed to develop and test a systemic approach to research practice are reported. The focus was on the learning and knowing processes experienced by individuals, groups and...
This article presents a different dimension of the innovation systems approach, going beyond analysis and shedding light on how these processes can be facilitated in practice. This is based on 20 years' experience with innovations systems. The focus is on...
This study reports on the contribution of farmer– to-farmer video-mediated group learning to capital assets building of women in resource-poor households. Data were collected using structured interviews with 140 randomly selected women in 28 video villages and 40 women in...
The CGIAR Research Program on Aquatic Agricultural Systems (AAS) is a research in development program which aims to foster innovation to respond to community needs, and through networking and social learning to bring about development outcomes and impact at scale....