Institutions First

7 Pages Posted: 19 Feb 2011

See all articles by Peter J. Boettke

Peter J. Boettke

George Mason University - Department of Economics; Mercatus Center at George Mason University

Alexander Fink

University of Leipzig

Date Written: January 19, 2011

Abstract

Chang (2011) raises doubts about the effects of institutions on economic development and questions the positive effects of entirely free markets based on secure private property rights. We respond by stressing that institutions structure the incentives underlying individual action, secure private property rights are indispensable for prosperity, institutions have a first-order effect whereas policies only have a second-order effect, successful institutional change comes from within a society, and given the status quo of developing countries first-world institutions are likely not to be available to them.

Suggested Citation

Boettke, Peter J. and Boettke, Peter J. and Fink, Alexander, Institutions First (January 19, 2011). GMU Working Paper in Economics No. 11-09, Available at SSRN: https://ssrn.com/abstract=1764268 or http://dx.doi.org/10.2139/ssrn.1764268

Peter J. Boettke

George Mason University - Department of Economics ( email )

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Alexander Fink (Contact Author)

University of Leipzig ( email )

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