In the Shadow of Violence: A New Perspective on Development

32 Pages Posted: 16 Sep 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: August 30, 2015

Abstract

This paper extends the North, Wallis, and Weingast (2009) framework for understanding the problems of development. Our approach distinguishes two development problems that are normally conflated. Most approaches to development focus on the second problem, namely, the transition of societies from limited access orders (LAOs), which limit access to organizations, to open access orders (OAOs), which allows any body to form an organization. In contrast, the first challenge involves the development of LAO societies toward forms of organization that enable more economic output, reduced violence, stable political outcomes, and greater individual well being within the LAO framework. Most World Bank borrowers face the first challenge.

The control of violence is central to the logic of all LAOs and is therefore at the heart of the problem of development. Because the traditional economic framework fails to understand that LAO’s are organized to prevent violence, its policy recommendations usually fail to produce development and sometimes exacerbate the problem. Indeed, the Washington consensus of the 2000s is dominated by efforts to embed institutions of open access orders – property rights, entry into markets, elections, and institutions of good governance – directly into limited access orders. These efforts focus on the second development problem, not the first; they are therefore miss-targeted. Instead, our approach provides specific implications of the approach for development policy in four areas: rents and market constraints, organizations, democracy and elections, and organizations with violence capacity.

Keywords: economic development, limited access orders, open access orders, violence

JEL Classification: H11, H41, O13, O14, O53, O54, O55

Suggested Citation

North, Douglass C. and Wallis, John J. and Webb, Steven Benjamin and Weingast, Barry R., In the Shadow of Violence: A New Perspective on Development (August 30, 2015). Available at SSRN: https://ssrn.com/abstract=2653254 or http://dx.doi.org/10.2139/ssrn.2653254

Douglass C. North

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

One Brookings Drive
St. Louis, MO 63130
United States
314-935-5809 (Phone)
Not Available (Fax)

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
United States

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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