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Article: Institutions matter, but not for everything: the role of geography and resource endowments in development shouldn't be underestimated.
- Article from:
- Finance & Development
- Article date:
- June 1, 2003
- Author:
CopyrightCOPYRIGHT 2003 International Monetary Fund. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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THE DEBATE over the role of institutions in economic development has become dangerously simplified. The vague concept of "institutions" has become, almost tautologically, the intermediate target for all efforts to improve an economy. If an economy is malfunctioning, the reasoning goes, something must be wrong with its institutions. In fact, recent papers have argued that institutions explain nearly everything about a country's level of economic development and that resource constraints, physical geography, economic policies, geopolitics, and other aspects of internal social structure, such as gender roles and inequalities between ethnic groups, have little or no effect. ...