The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Institutional Trap

  • Victor Polterovich
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2717

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.

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 

JEL Classification

P3 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Victor Polterovich
    • 1
  1. 1.