Setting Standards: Information Accumulation in Development

45 Pages Posted: 18 Nov 1997

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Fabrizio Zilibotti

Yale University; Centre for Economic Policy Research (CEPR)

Date Written: March 1997

Abstract

We propose a model in which economic relations and institutions in advanced and less developed economies differ as these societies have access to different amounts of information. This lack of information makes it hard to give the right incentives to managers and entrepreneurs. We argue that differences in the amount of information arise because of the differences in the scale of activities in rich and poor economies; namely, there is too little repetition of similar activities in poor economies, thus insufficient information to set the appropriate standards for firm performance. Our model predicts a number of institutional and structural transformations as the economy accumulates capital and information.

JEL Classification: D82, M13, O13, O14, O40

Suggested Citation

Acemoglu, Daron and Zilibotti, Fabrizio, Setting Standards: Information Accumulation in Development (March 1997). Available at SSRN: https://ssrn.com/abstract=18620 or http://dx.doi.org/10.2139/ssrn.18620

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-380b
Cambridge, MA 02142
United States
617-253-1927 (Phone)
617-253-1330 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Fabrizio Zilibotti (Contact Author)

Yale University ( email )

New Haven, CT 06520
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
163
Abstract Views
1,811
rank
198,914
PlumX Metrics