Political institutions and economic development

Authored by: Luz Marina Arias

Routledge Handbook of Comparative Political Institutions

Print publication date:  April  2015
Online publication date:  April  2015

Print ISBN: 9780415630887
eBook ISBN: 9781315731377
Adobe ISBN: 9781317551799


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Why are some countries rich and others poor? Part of the variation in economic development across countries can be explained by accumulation of human and physical capital and investments in innovation. However, substantial variation in economic development across countries remains after accounting for these factors. A growing body of literature emphasizes political institutions as the “deeper” determinants of economic development (e.g. Rodrik 2003, Helpman 2008). Political institutions encourage or discourage the rate of accumulation and innovation by influencing policy decision-making and by enabling (or not) politicians to credibly commit to policies.

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