Institutions first

Peter Boettke and Alexander Fink

MPRA Paper from University Library of Munich, Germany

Abstract: Chang (2011) raises doubts about the effects of institutions on economic development and questions the positive effects of entirely free markets based on secure private property rights. We respond by stressing that institutions structure the incentives underlying individual action, secure private property rights are indispensable for prosperity, institutions have a first-order effect whereas policies only have a second-order effect, successful institutional change comes from within a society, and given the status quo of developing countries first-world institutions are likely not to be available to them.

Keywords: Institutions; Incentives (search for similar items in EconPapers)
JEL-codes: B52 B53 O10 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (15)

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Journal Article: Institutions first (2011)
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