Limited Access Orders: An Introduction to the Conceptual Framework

Posted: 13 Jul 2012 Last revised: 29 Jan 2015

See all articles by Douglass C. North

Douglass C. North

Washington University in St. Louis - Department of Economics

John Joseph Wallis

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Steven B. Webb

World Bank - Economic Development Institute

Barry R. Weingast

Stanford University, Department of Political Science

Date Written: 2013

Abstract

The paper lays out a new framework for understanding problems of development. It emphasizes that all societies must solve the problem of violence and distinguishes between two ways in which societies solve this problem. Limited access orders, covering most developing countries today, solve the problem of violence by granting political elites privileged control over parts of the economy, each getting some share of the rents. Since outbreaks of violence reduce the rents, elite factions have incentives to refrain from violence most of the time. Stability of the rents and thus of the social order requires limiting access and competition. In contrast, open access orders, which dominate the modern developed world, control the problem of violence through open access and competition. The framework provides a new view of development. It shows that transplanting institutions from open access orders into limited access orders – such as markets, elections, and corporate law – often do not have their intended effect because the institutions work differently under limited access than open access. When development policy advice threatens the logic of stability in limited access orders, these societies often resist or sabotage the recommended measures.

Keywords: Political economy of development; control of violence, comparative economic systems

JEL Classification: O1, H1, P5

Suggested Citation

North, Douglass C. and Wallis, John J. and Webb, Steven Benjamin and Weingast, Barry R., Limited Access Orders: An Introduction to the Conceptual Framework (2013). Douglass C. North, John Joseph Wallis, Steven B. Webb and Barry R. Weingast, In the Shadow of Violence: Politics, Economics, and The Problems of Development Cambridge University Press, 2013.. Available at SSRN: https://ssrn.com/abstract=2104691

Douglass C. North

Washington University in St. Louis - Department of Economics ( email )

One Brookings Drive
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John J. Wallis

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3552 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Steven Benjamin Webb

World Bank - Economic Development Institute ( email )

1818 H Street
Washington, DC 20433
United States

Barry R. Weingast (Contact Author)

Stanford University, Department of Political Science ( email )

Stanford, CA 94305-6010
United States
650-723-0497 (Phone)
650-723-1808 (Fax)

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