Second-Best Institutions

No 14050, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The focus of policy reform in developing countries has moved from getting prices right to getting institutions right, and accordingly countries are increasingly being advised to move towards "best-practice" institutions. This paper argues that appropriate institutions for developing countries are instead "second-best" institutions -- those that take into account context-specific market and government failures that cannot be removed in short order. Such institutions will often diverge greatly from best practice. The argument is illustrated using examples from four areas: contract enforcement, entrepreneurship, trade openness, and macroeconomic stability.

JEL-codes: O1 (search for similar items in EconPapers)
Date: 2008-06
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-ent and nep-pke
Note: EFG PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (123)

Published as Dani Rodrik, 2008. "Second-Best Institutions," American Economic Review, American Economic Association, vol. 98(2), pages 100-104, May.

Downloads: (external link)
http://www.nber.org/papers/w14050.pdf (application/pdf)

Related works:
Journal Article: Second-Best Institutions (2008)
Working Paper: Second-Best Institutions (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:14050

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w14050

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().