Economies in Transition and in Development: A Possible Warning from Adam Smith
Maria Pia Paganelli
May 24, 2011
The European Journal of the History of Economic Thought. 2012. 19.2: 149-163.
If Adam Smith were asked about transitioning and developing economies today, one may infer, he might suggest introducing small, yet constant, opportunities for wealth accumulation, avoiding the sudden accumulation of riches. Good institutions and the moral rules often needed to comply with them are more likely to be disregarded if there are large, sudden material gains, such as new wealth generated by the sudden opening of markets or government granting monopolies. For Smith, the desire to show off in front of others can inhibit moral behavior and respect for good institutions, generating perverse incentives that hinder growth. Gradual change is to be preferred.
Number of Pages in PDF File: 16
Keywords: Adam Smith, transition, development, institutions, gradualism
JEL Classification: B12, F1, O1, PAccepted Paper Series
Date posted: June 7, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.390 seconds