Rents and economic development: the perspective of Why Nations Fail

We present the approach to comparative economic development ofWhy Nations Fail. Economic prosperity requires inclusive economic institutions —those which create broad based incentives and opportunities in society. Extractive economic institutions, which lack these properties, create poverty. Variation in economic institutions is created by differences in political institutions. Inclusive economic institutions are the result of politica l choices which arise under inclusive political institutions: a strong state and a broad distribution of power in society. When either of these conditions fails one has extractive political institutions that lead to extractive economic institutions. We relate our analysis to Tullock’s notion of ‘ rent seeking’.

Source: European Journal of Applied Physiology - April 3, 2019 Category: Physiology Source Type: research