ABSTRACT
This chapter argues that public choice theory and constitutional economics can provide the guidelines needed to design efficient and self-enforcing constitutional rules for a society. Both internal and external groups have been responsible for the renewed interest in policy reform in the developing countries. The impetus to policy reform in the developing countries has been provided by internal groups. Most of the European countries that possessed colonies in what is the Third World practiced some form of democracy at home, access to political and economic markets in the colonies was limited to colonial officers and settlers. Independence offered citizens of the developing countries an opportunity to choose new political and economic institutions to provide for sustainable development in the post-independence period. These countries failed to develop and adopt efficient and self-enforcing constitutional rules. An important aspect of political economy in many developing countries has been the rise of statism as a development model.
