Abstract
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.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
This is a preview of subscription content, log in via an institution to check access.
Bibliography
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.
Balatsky. 2002. Functional properties of institutional traps. Economics and mathematical methods (Funkzional’nye svoistva instituzional’nyh lovushek). Ekonomika i matematicheskie metody 38: 54–72 (In Russian).
Bicchieri, C., and C. Rovelli. 1995. Evolution and revolution: The dynamics of corruption. Ration Soc 7: 201–224.
Chong, A., and C. Calderon. 2000. Causality and feedback between institutional measures and economic growth. Econ Polit 12: 201–224.
Conradt, D.P. 1989. Changing German political culture. In Civic culture revisited, ed. G.A. Almond and S. Verba. Newbury Park: Sage.
Drazen, A., and V. Grilli. 1993. The benefit of crises for economic reforms. Am Econ Rev 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 R. Ryterman. 1992. The interenterprise arrears crisis in Russia. Post-Soviet Affairs 8: 331–361.
Ickes, B.W., and L. Samuelson. 1987. Job transfers and incentives in complex economic organizations: Thwarting the Ratchet effect. Rand Journal of Economics 18: 275–286.
Jonson, S., D. Kaufman, and A. Shleifer. 1997. The unofficial economy in transition. Brook Pap Econ Act 2: 159–239.
North, D. 1990. Institutions, institutional change and economic performance. Cambridge, UK: 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. J Monet Econ 40: 185–202.
Zak, P.J., and S. Knack. 2001. Trust and growth. Economic Journal 111: 295–321.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 2008 The Author(s)
About this entry
Cite this entry
Polterovich, V. (2008). Institutional Trap. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_2717-1
Download citation
DOI: https://doi.org/10.1057/978-1-349-95121-5_2717-1
Received:
Accepted:
Published:
Publisher Name: Palgrave Macmillan, London
Online ISBN: 978-1-349-95121-5
eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences