Economic governance consists of the processes that support economic activity and economic transactions by protecting property rights, enforcing contracts, and taking collective action to provide appropriate physical and organizational infrastructure. These processes are carried out within institutions, formal and informal. The field of economic governance studies and compares the performance of different institutions under different conditions, the evolution of these institutions, and the transitions from one set of institutions to another.
KeywordsAccountability Arbitration Authoritarianism and economic development Better Business Bureaus (USA) Coase, R. Colonization Commitment Common law vs civil law Common-pool resource management Corporate governance Corruption Corruption control Credit rating agencies Democracy and economic development Democracy: parliamentary vs presidential Discriminating alignment hypothesis Economic governance Electoral rules Ethnic trading networks Evolution of institutions Exploitation Formal vs informal (private) contract enforcement For-profit private institutions Governance Growth and governance Incentive compatibility Inequality Information verifiability Institutions and transition International contracts Mafia Market institutions Monitoring mechanisms Opportunism Political stability Prisoner’s Dilemma Property rights enforcement Regulatory burden Relation-based vs rule-based governance Reputation mechanisms Rule of law Slavery Social networks Social norms Subgame perfection Title registration Transaction cost economics Trust Voice World Bank World Trade Organization Yakuza
JEL ClassificationsD02 H11 K14 P26 P51
I thank Tore Ellingsen, Diego Gambetta, Karla Hoff, Eva Meyersson-Milgrom, Dani Rodrik, Oliver Williamson, and the editors for comments on previous drafts, and the National Science Foundation for research support.
- Bagwell, K., and R. Staiger. 2003. The economics of the world trading system. Cambridge, MA: MIT Press.Google Scholar
- Barro, R. 1999. Determinants of economic growth: A cross-country empirical study. Cambridge, MA: MIT Press.Google Scholar
- Calvert, R. 1995a. The rational choice theory of social institutions: Cooperation, communication, and coordination. In Modern political economy: Old topics, new directions, ed. J. Banks and E. Hanushek. Cambridge: Cambridge University Press.Google Scholar
- Calvert, R. 1995b. Rational actors, equilibrium, and social institutions. In Explaining social institutions, ed. J. Knight and I. Sened. Ann Arbor: University of Michigan Press.Google Scholar
- De Soto, H. 2000. Mystery of capital: Why capitalism triumphs in the west and fails everywhere else. New York: Basic Books.Google Scholar
- Dezalay, Y., and B. Garth. 1996. Dealing in virtue: International commercial arbitration and the construction of a transnational order. Chicago/London: University of Chicago Press.Google Scholar
- Dixit, A. 2004. Lawlessness and economics: Alternative modes of governance. Princeton: Princeton University Press.Google Scholar
- Dower, J. 1999. Embracing defeat: Japan in the wake of world war II. New York: W.W. Norton.Google Scholar
- Engerman, S., and K. Sokoloff. 2002. Factor endowments, inequality, and paths of development among New World economies. Economia 3: 41–109.Google Scholar
- Ensminger, J. 1992. Making a market: The institutional transformation of an African society. New York: Cambridge University Press.Google Scholar
- Fafchamps, M. 2004. Market institutions in Sub-Saharan Africa: Theory and evidence. Cambridge, MA: MIT Press.Google Scholar
- Gambetta, D. 1993. The Sicilian Mafia: The business of private protection. Cambridge, MA: Harvard University Press.Google Scholar
- Greif, A. 1993. Contract enforceability and economic institutions in early trade: The Maghribi traders’ coalition. American Economic Review 83: 525–548.Google Scholar
- Online. Available at http://www.worldbank.org/wbi/governance/pubs/govmatters4.html. Accessed 20 Apr 2006.
- Kranton, R. 1996. Reciprocal exchange: A self–sustaining system. American Economic Review 86: 830–851.Google Scholar
- Williamson, O. 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.Google Scholar
- Williamson, O. 1995. The mechanisms of governance. New York: Oxford University Press.Google Scholar
- World Bank Institute. Governance and anti-corruption. Online. Available at http://www.worldbank.org/wbi/governance. Accessed 20 Apr 2006.