Institutions and development: A view from below

Rohini Pande, Christopher Udry

Research output: Chapter in Book/Report/Conference proceedingChapter

15 Scopus citations

Abstract

In this paper we argue for greater exploitation of synergies between research on specific institutions based on micro-data and the big questions posed by the institutions and growth literature. To date, the macroeconomic literature on institutions and growth has largely relied on cross-country regression evidence. This has provided compelling evidence for a causal link between a cluster of ‘good’ institutions and more rapid long run growth. However, an inability to disentangle the effects of specific institutional channels on growth or to understand the impact of institutional change on growth will limit further progress using a cross-country empirical strategy. We suggest two research programs based on micro-data that have significant potential. The first uses policy-induced variation in specific institutions within countries to understand how these institutions influence economic activity. The second exploits the fact that the incentives provided by a given institutional context often vary with individuals’ economic and political status. Variations in how individuals respond to the same institution can be used to both identify how institutions affect economic outcomes and to understand how institutional change arises in response to changing economic and demographic pressures.

Original languageEnglish (US)
Title of host publicationAdvances in Economics and Econometrics
Subtitle of host publicationTheory and Applications, Ninth World Congress, Volume II
PublisherCambridge University Press
Pages349-412
Number of pages64
ISBN (Electronic)9781139052276
ISBN (Print)0521692091, 9780521871532
DOIs
StatePublished - Jan 1 2009

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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