Institutional Change and Economic Development

Sample Chapter
  • Edited Ha-Joon Chang

    Institutional Change and Economic Development
    ISBN-10: 92-808-1143-6,
    ISBN-13: 978-92-808-1143-8
    United Nations University Press
    September 2007

    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 emphasize the role of institutions in economic development. However, there are still some important knowledge 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 – spanning from Britain, Switzerland and the USA in the past to today’s Botswana, Brazil and China. The contributors show that there is no simple formula for institutional development. Instead, real-life experiences of institutional development have been achieved through a mixture of deliberate imitation of foreign institutions and local institutional innovations.

    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.

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

    Table of Contents

    • Institutional change and economic development: an introduction
      Ha-Joon Chang

    Part I: Theoretical Overview

    • Understanding the relationship between institutions and economic development – some key theoretical issues
      Ha-Joon Chang
    • Extending the ‘institutional’ turn: property, politics and development trajectories
      Peter Evans
    • Institutionalism ancient, old, and new: a historical perspective on institutions and uneven development
      Erik Reinert

    Part II: Evolution of Particular Institutions

    • Modern bureaucracy
      John Toye
    • Central banks as agents of economic development
      Gerald Epstein
    • Corporate governance, innovative enterprise, and economic development
      William Lazonick
    • The political economy of taxation and tax reform in developing countries
      Jonathan di John
    • The rule of law, legal traditions, and economic growth: the East Asian example
      Meredith Jung-En Woo

    Part III: Country Experiences

    • State formation and the construction of institutions for the first industrial nation
      Patrick Karl O’Brien
    • The role of Federalism in Developing the US during nineteenth-century globalization
      Eric Rauchway
    • Institutions and economic growth: the successful experience of Switzerland, 1870–1950 221
      Thomas David and André Mach
    • The rise and halt of economic development in Brazil, 1945–2004: industrial catching-up, institutional innovation and financial fragility
      Leonardo Burlamaqui, José A. P. de Souza and Nelson H. Barbosa-Filho
    • Rethinking import-substituting industrialization: development strategies and institutions in Taiwan and China
      Tianbiao Zhu
    • Developmental nationalism and economic performance in Africa: the case of three ‘successful’ African economies
      Julius Kiiza