The relationship between institutions and economic development

Tharanga Samarasinghe

MPRA Paper from University Library of Munich, Germany

Abstract: Development is a continuous process which increase choices available for human beings. However, there is a huge disparity throughout the world in relation to economic development. Differences in the institutions show a direct relationship with difference in the economic development. Established political and economic institutions affects the level of investments for human capital, physical capital and technology formation which decide the capacity of good and service production in a particular country. Through that, established institutions of a country influences directly on the level of development in a particular country. This article discusses the institutions, evolution and types of institutions, relationship between institutions and markets, and functions of institutions for economic development. Further this article discusses the way that trust and anti-corruption affects the economic development and link between political power and institutions. Finally, some evidences to show the impacts of institutions on economic development are discussed.

Keywords: development; institutions; political institutions; economic institutions; inclusive institutions; extractive institutions (search for similar items in EconPapers)
JEL-codes: D02 E02 O1 O10 O43 (search for similar items in EconPapers)
Date: 2019-12-22, Revised 2019-12-29
New Economics Papers: this item is included in nep-gro, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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