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;...
The Africa Capacity Indicators 2012 Report (2012A CIR) seeks to address the issues of capacity development on the African continent, building on the dialogue stemming from the inaugural 2011 ACIR and linking this to a very pertinent issue facing Africa...
This section discusses the role of innovation brokers in bridging communication gaps between various actors of innovation systems. On the basis of recent experience in the Netherlands, it outlines the success of brokers in finding solutions adapted to the needs...
During May 2010 the International Centre for Tropical Agriculture (CIAT) hosted two exciting events related to knowledge management (KM): The Knowledge Share Fair for Latin America and the Caribbean, funded by the Food and Agriculture Organization of the United Nations...