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INSTITUTIONAL TRAPS AND ECONOMIC GROWTH
Author(s) -
Gradstein Mark
Publication year - 2008
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2008.00505.x
Subject(s) - democratization , underdevelopment , politics , economics , power (physics) , distribution (mathematics) , quality (philosophy) , economic system , institutional change , limit (mathematics) , political economy , democracy , political science , economic growth , public administration , law , mathematics , mathematical analysis , philosophy , physics , epistemology , quantum mechanics
This article's point of departure is that low‐quality institutions, concentration of political power and material wealth, and underdevelopment are persistent over time. Its analytical model views an equal distribution of political power as a commitment device to enhance institutional quality, thereby promoting growth. The politically powerful coalition contemplates relinquishing of its power through democratization, weighing this advantageous consequence against the limit on own appropriative ability that it entails. The possibility of two developmental paths is exhibited: with concentration of political and economic power, low‐quality institutions, and slow growth; and a more equal distribution of political and economic resources, high‐quality institutions, and faster growth.