One More Time : What Are Institutions and How Do They Change?
This paper defines institutions, presents their basic characteristics, and discusses forces for institutional change. It draws on a wealth of research and study by scholars in different fields and follows from the flagship 2002 World Development Re...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/261701525108237527/One-more-time-what-are-institutions-and-how-do-they-change http://hdl.handle.net/10986/29767 |
| Summary: | This paper defines institutions,
presents their basic characteristics, and discusses forces
for institutional change. It draws on a wealth of research
and study by scholars in different fields and follows from
the flagship 2002 World Development Report on this topic,
including relevant new research since then that illuminates
key issues. The definition of institutions includes rules
and organizations (specifically rules guiding peoples’
actions). The paper emphasizes the diversity of institutions
that can effectively perform similar functions, the
arguments for and against standardization of institutions
across specific transactions or groups, and the implications
of these choices. It highlights the relationship between
informal and formal institutions. It discusses forces for
institutional change influencing all economies, ranging from
external shocks (whether they be economic or weather-related
shocks or driven by wars) to internal dynamics, such as
those following population growth or compositional changes,
and those following technological innovations. Many of these
forces have a two-way relationship with institutions: they
are affected by them and, in turn, influence whether and
when they change. A special section is devoted to
institutional transplants and their effectiveness. The paper
concludes with a discussion of whether and under what
conditions institutional change can be externally directed
and the lessons for aid donors. |
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