Institutions, Development, Growth: Where does Evidence Stand? – Durlauf (2018)


Whilst there is a general agreement in the development field that “institutions” matter, disagreements have occurred regarding specifics and institutions in particular contexts. This paper provides an overview of the evidence, comprising of historical studies, statistical evidence and structural analyses, on institutions and growth by exploring how and to what extent particular institutions matter in particular contexts. Durlauf investigates the effects of institutions on growth and development specifically. The author discusses definitions and measurements and addresses conceptual issues in defining institutions. Statistical evidence on growth and institutions is examined and finally potential new directions for research are provided. The paper concludes by arguing that institutions have been shown to matter both in general and in a host of specific contexts which is true whether one considers a particular institution as broad as democracy or as pathological as slavery. This argument also remains true when the objective is to explain why different regions of the world, or countries within regions exhibit substantial heterogeneity.