Transition and Institutions
This article examines the evolution of institutions and economists’ thinking on institutions during transition. Early in transition, institutions were virtually ignored in the majority of normative prescriptions, but were central in the evolutionary institutional approach. Later, after events influenced intellectual developments, institutions were at the centre of analysis. Growth is strongly related to institutional construction. Transition countries built institutions speedily but with marked variation across countries. Legal systems and independent governmental agencies were sources of institutional growth, while government bureaucracies and informal mechanisms detracted from institutional growth. In China, reforms addressed problems that institutions usually do, but in unusual ways.
KeywordsChina Economics in Colonialism Corruption Creative destruction Dual track liberalization Evolutionary-institutional view Institutional development Institutions Liberalization Market institutions Privatization Resource curse Rule of law Shock therapy Social capital Stabilization Transition
JEL ClassificationP2 P3 N4 O17 K0
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