OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

Institutions and Development

A Critical Review

In recent years, the role of institutions for development has received considerable attention from development researchers, policy makers and practitioners. This paper reviews the evidence on the impact of institutions on growth and other development outcomes. Most of the reviewed studies find a strong positive correlation between the quality and performance of institutions on the one hand and development outcomes on the other. However, due to various methodological approaches and conceptual problems, the evidence on causation is still thin. To address some of the identified weaknesses, the paper proposes an innovative analytical framework that maps out channels of influence between institutions and development outcomes. The developed framework stresses the idea that institutions do not stand alone but are embedded in a local setting influenced by historical trajectories and culture. Studies analysing the impact of institutions on development outcomes need to take into account the ...


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