The Institutional Foundation of Economic Development

by Shiping Tang

Overview

A systemic account of how institutions shape economic development

Institutions matter for economic development. Yet despite this accepted wisdom, new institutional economics (NIE) has yet to provide a comprehensive look at what constitutes the institutional foundation of economic development (IFED). Bringing together findings from a range a fields, from development economics and development studies to political science and sociology, The Institutional Foundation of Economic Development explores the precise mechanisms through which institutions affect growth.

Shiping Tang contends that institutions shape economic development through four “Big Things”: possibility, incentive, capability, and opportunity. From this perspective, IFED has six major dimensions: political hierarchy, property rights, social mobility, redistribution, innovation protection, and equal opportunity. Tang further argues that IFED is only one pillar within the New Development Triangle (NDT): sustained economic development also requires strong state capacity and sound socioeconomic policies.

Arguing for an evolutionary approach tied to a country’s stage of development, The Institutional Foundation of Economic Development advances an understanding of institutions and economic development through a holistic, interdisciplinary lens.

Product Details

ISBN-13:	9780691235585
Publisher:	Princeton University Press
Publication date:	09/06/2022
Sold by:	Barnes & Noble
Format:	eBook
Pages:	328
File size:	3 MB

About the Author

Shiping Tang is Fudan Distinguished Professor at Fudan University in Shanghai. His many books include The Social Evolution of International Politics, On Social Evolution, and A General Theory of Institutional Change.

Table of Contents

List of Illustrations ix

Abbreviations xi

Preface xiii

Introduction: Institutions Matter? 1

1 Laying the Groundwork: What Do We Know about IFED? 21

2 A Systematic Statement of IFED 38

Excursion: Three Inequalities 53

3 The Positional Market and Development: Social Mobility as an Incentive 62

4 Redistribution and Development: Good Redistribution as Empowerment 91

5 Hierarchy, Liberty, and Innovation: A New Institutional Theory and Qualitative Evidence 121

6 Democracy's Unique Advantage in Promoting Development: Quantitative Evidence 141

7 Development as a Social Evolutionary Process 162

8 The New Development Triangle: State Capacity, Institutional Foundation, and Socioeconomic Policy 180

Conclusion: Laying the Foundation for Development 208

Appendixes 219

Notes 249

Bibliography 261

Index 297

What People are Saying About This

From the Publisher

“This is a thorough and stimulating book on the institutional foundations of development, appropriately grounded in evidence and the experience of key countries. Shiping Tang moves our understanding of this important set of issues significantly forward.”—Dani Rodrik, Harvard University

“Engaging with literature that extends from classical and neoclassical economics to contemporary institutional economics, this is a bold magnum opus about the Great Divergence. Many people—including those outside the field of economic development—will read it, buoyed along by the sheer momentum of Tang’s argument.”—Robert H. Wade, author of Governing the Market

“Challenging the view of institutional determinism about property rights and democracy, Tang brings new attention and thinking to the field of economic development.”—Justin Yifu Lin, author of Beating the Odds