Year: 2008
Type: article
Abstract: The focus of policy reform in developing countries has moved from getting prices right to getting institutions right, and accordingly countries are increasingly being advised to move towards "best-practice" institutions.This paper argues that appropriate institutions for developing countries are instead "second-best" institutions --those that take into account context-specific market and government failures that cannot be removed in short order.Such institutions will often diverge greatly from best practice.The argument is illustrated using examples from four areas: contract enforcement, entrepreneurship, trade openness, and macroeconomic stability.
Source: American Economic Review
DOI: 10.3386/w14050
Author: Dani Rodrik
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2164962873