Top Highlights

• In recent decades, economists have increasingly emphasized the importance of institutions as a fundamental factor for economic growth and development.
• investigated theoretically and empirically the impact of institutions on some aggregate developmental outcomes (mostly GDP per capita or growth, but sometimes other outcomes such as health, education, or political rights).
• they suggest that institutional quality may be an important determinant of the persistence of poverty and low…
• This calls for a need to provide precise descriptions of the mechanisms through which institutions play a role in determining various development outcomes as well as to move beyond aggregate studies to explore…
• we must emphasize the importance of informal institutions in developing countries and their significant role in shaping socioeconomic outcomes. They are, however, much harder to “measure.”1 We also need to better understand their interactions with formal institutions and how they…