[...]... Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency – SIDA), and the United Kingdom (Department for International Development) CHAPTER 1 INSTITUTIONAL CHANGE AND ECONOMIC DEVELOPMENT: AN INTRODUCTION HA-JOON CHANG1 1 The rising interest in the role of institutions in economic development The issue of institutional development, or ‘governance reform’, has come to prominence... principles that enrich our understanding, especially if we are willing to beyond the rather narrow theoretical and empirical confines of the orthodox discourse on institutions By doing so, it injects some new ideas and fresh thinking into the study of institutional change and economic development Deepak Nayyar Chair of the Board, UNU-WIDER, Helsinki and Professor of Economics, Jawaharlal Nehru University,... Programme Officer (Governance and Civil Society; Global Economic Governance) on leave from UERJ State University, Rio de Janeiro His main research interests are evolutionary economics, global economic governance, patterns of economic development, competition, innovation, and economic regulation Ha-Joon Chang is the Reader in the Political Economy of Development at the Faculty of Economics, University of... Africa, and Uganda), the Americas (Brazil, Colombia, Costa Rica, El Salvador, Guatemala, and the USA), Asia (China, Japan, Korea, Malaysia, and Taiwan), and Europe (Britain and Switzerland) INSTITUTIONS AND ECONOMIC DEVELOPMENT 2 Key findings from the chapters 2.1 5 Functional multiplicity of institutions Institutions can, and do, serve multiple functions As pointed out in the chapter by Chang (chapter... itself) 2.4 Structure and human agency in institutional change As the theoretical chapter by Chang (chapter 2) emphasizes, in the mainstream theory of institutional change, there is no ‘real’ human agency In the mainstream theory, material interests that motivate people to change institutions (e.g., pressure for democracy from small independent farmers) are pre-determined by ‘objective’ economic (or even... influence or otherwise of developmental nationalism was the key variable explaining why some sub-Saharan African countries were more successful in building institutions like developmentalist bureaucracy than others 10 INSTITUTIONAL CHANGE AND ECONOMIC DEVELOPMENT However, ideas are not merely tools that human actors cynically manipulate in order to make the institutional changes that they prefer Institutions... economy of industrial policy and economic growth in Latin America, and the political economy of taxation and tax reform in less developed countries Gerald Epstein is Professor of Economics and founding Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst His major areas of research are Macroeconomics and International Economics and his recent publications... blatantly ignored institutional differences across countries, thereby recommending identikit policies, in what has come to be known as the ‘onesize-fits-all’ approach to economic policy Today, it is widely accepted even by many orthodox economists that policies directly derived from the experiences of the developed countries – or, even worse, from economic 2 INSTITUTIONAL CHANGE AND ECONOMIC DEVELOPMENT. .. increased only when the former is expanded, as higher tax revenue acts as an implicit collateral for the lenders to the government); which forms of 4 INSTITUTIONAL CHANGE AND ECONOMIC DEVELOPMENT taxes are more appropriate in which economic and political contexts and for what social purposes; how different forms of political resistance to different taxes may be overcome; and how best an effective tax collection... on the ‘US Political Economy and the Global Economic System’ He has implemented several research projects financed by UNU-WIDER, DFID, the Global Development Network, and other agencies, and publishes in the areas of economic governance, institutional reform, and the political economy of development William Lazonick is Professor at the University of Massachusetts Lowell and Distinguished Research Professor . for Development Economics Research (UNU-WIDER) Katajanokanlaituri 6 B, FIN-00160 Helsinki, Finland www.wider.unu.edu Institutional Change and Economic Development Edited by HA-JOON CHANG. 1. Institutional change and economic development: An introduction 1 Ha-Joon Chang Part I: Theoretical Overview 2. Understanding the relationship between institutions and economic development. bibliographical references and index. ISBN-13: 97 8-9 280811438 (pbk .) 1. Economic development Congresses. 2. Institutional economics Congresses. 3. Economic policy Congresses. I. Chang, Ha-Joon. HD73.I568