Institutions, Institutional Change, and Economic Performance

6 Pages Posted: 9 Jun 2009

See all articles by Wei Li

Wei Li

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Victor Abiad

University of Virginia - Darden School of Business

Abstract

Why are some countries much richer than others? This technical note proposes a framework to begin answering this question. The first part identifies inefficient institutions as the root cause of the economic differences between societies. The second part analyzes how these institutions change. And the final part suggests how lessons from this institutional framework can be applied.

Excerpt

UVA-BP-0475

INSTITUTIONS, INSTITUTIONAL CHANGE,

AND ECONOMIC PERFORMANCE

Why are some countries much richer than others? This technical note proposes a framework to begin answering this question. The first part identifies inefficient institutions as the root cause of the economic differences between societies. The second part analyzes how these institutions change. And the final part suggests how lessons from this institutional framework can be applied.

Institutions and Economic Performance

Economic theory implies that over time the economies of different countries will attain similar levels of wealth. When there is competition between organizations (be they tribes, companies, or countries), the less effective organizations die out and are replaced by more effective organizations.

. . .

Keywords: economic theory

Suggested Citation

Li, Wei and Abiad, Victor, Institutions, Institutional Change, and Economic Performance. Darden Case No. UVA-BP-0475, Available at SSRN: https://ssrn.com/abstract=1416542

Wei Li (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
804-243-7691 (Phone)
804-243-7681 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/li.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Victor Abiad

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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