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Economic growth and institutional change

Economic growth and institutional change Economists have recently emphasized the role which institutional change plays in the process of economic growth and development. Focusing on the behavior of the state, effective constraints on the ruling elite are seen as a necessary precursor to successful economic growth. However, it is argued in this paper that causality runs the other way. Rapid growth even with dictatorial regimes leads to political development and institutional structures which provide a foundation for successful longterm growth. It will be further argued that the greatest potential for stimulating political development comes as the result of rapid agricultural growth. The institutional constraints arising out of political development create an environment within which the ruling elite become developmental rather than predatory. The cases of English and Japanese industrialization will be used to illustrate these ideas. The relevance of the analyses for today's developing countries is discussed and illustrated with reference to the African experience. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Development Issues Emerald Publishing

Economic growth and institutional change

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1446-8956
DOI
10.1108/eb045853
Publisher site
See Article on Publisher Site

Abstract

Economists have recently emphasized the role which institutional change plays in the process of economic growth and development. Focusing on the behavior of the state, effective constraints on the ruling elite are seen as a necessary precursor to successful economic growth. However, it is argued in this paper that causality runs the other way. Rapid growth even with dictatorial regimes leads to political development and institutional structures which provide a foundation for successful longterm growth. It will be further argued that the greatest potential for stimulating political development comes as the result of rapid agricultural growth. The institutional constraints arising out of political development create an environment within which the ruling elite become developmental rather than predatory. The cases of English and Japanese industrialization will be used to illustrate these ideas. The relevance of the analyses for today's developing countries is discussed and illustrated with reference to the African experience.

Journal

International Journal of Development IssuesEmerald Publishing

Published: Feb 1, 2005

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