Polterovich, Victor (2007): Institutional Trap. Published in: The New Palgrave Dictionary of Economics (2008)
Download (58kB) | Preview
One of the main obstacles for successful economic development is the formation of institutional traps, inefficient yet stable norms of behaviour. Domination of barter exchange, arrears, corruption and black market activities are examples of institutional traps that have hampered reforms in transition economies. Institutional traps are supported by mechanisms of coordination, learning, linkage and cultural inertia. The acceleration of economic growth, systemic crisis, the evolution of some cultural characteristics and the development of civil society may result in breaking out of institutional traps. Examples from the history of the United States and Russia are considered.
|Item Type:||MPRA Paper|
|Original Title:||Institutional Trap|
|Keywords:||arrears; barter; civic culture; civil society; coordination failures; corruption; cultural inertia; hysteresis; institutional trap; linkage effect; lock-in; multiple equilibria; path dependence; rent seeking; reputation; systemic crises; transaction costs; transformation costs; transitional rent; trust|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development|
|Depositing User:||Victor Polterovich|
|Date Deposited:||10. Feb 2010 11:16|
|Last Modified:||13. Feb 2013 07:49|
Arthur, W. B. 1988. Self-reinforcing mechanisms in economics. In The Economy as an Evolving Complex System, ed. P. W. Anderson, K. Arrow and D. Pines. Santa Fe: Addison-Wesley Publishing Company.
Balatsky. 2002. Functional properties of institutional traps. Economics and mathematical methods (Funkzional’nye svoistva instituzional’nyh lovushek). Ekonomika I matematicheskie metody) 38, 54–72. (Russian).
Bicchieri, C. and Rovelli, C. 1995. Evolution and revolution: the dynamics of corruption. Rationality and Society 7, 201–24.
Chong, A. and Calderon, C. 2000. Causality and feedback between institutional measures and economic growth. Economics and Politics 12, 201–24.
Conradt, D. P. 1989. Changing German political culture. In Civic Culture Revisited, ed. G. A. Almond and S. Verba. Newbury Park: Sage Publications.
Drazen, A. and Grilli, V. 1993. The benefit of crises for economic reforms. American Economic Review 83, 598–607.
Howitt, P. 2003. Coordination failures. In An Encyclopedia of Macroeconomics, ed. B. Snowdon and H. R. Vane. Cheltenham: Edward Elgar.
Ickes, B. W. and Ryterman, R. 1992. The interenterprise arrears crisis in Russia. Post-Soviet Affairs 8, 331–61.
Ickes, B. W. and Samuelson, L. 1987. Job transfers and incentives in complex economic organizations: thwarting the Ratchet effect. Rand Journal of Economics 18, 275–86.
Jonson, S., Kaufman, D. and Shleifer, A. 1997. The unofficial economy in transition. Brookings Papers on Economic Activity 2, 159–239.
Matsuyama, K. 2008. Poverty trap. In L. Blume and S. Durlauf, ed., The New Palgrave Dictionary of Economics, 2nd edn. London: Macmillan.
North, D. 1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
Polterovich, V. 2000. Institutional traps. In The New Russia: Transition Gone Awry, ed. L. R. Klein and M. Pomer. Stanford: Stanford University Press.
Polterovich, V. 2005. Institutional traps: is there a way out? Social Sciences, A Quarterly Journal of the Russian Academy of Sciences, 36, 30–40.
Tirole, J. A. 1996. A theory of collective reputations (with applications to the persistence of corruption and to firm quality). Review of Economic Studies 63, 1–22.
Uribe, M. 1997. Hysteresis in a simple model of currency substitution. Journal of Monetary Economics 40, 185–202.
Zak, P. J. and Knack, S. 2001. Trust and growth. Economic Journal 3l, 295–321.