ABSTRACT
A central claim of most theories of economic development is that a key to successful growth is “getting the institutions right.” In the West there is a rich literature devoted to what makes institutions right or wrong in terms of fostering growth, dating from at least the time of Adam Smith and on down through to Coase (1988, 1992), North (1990, 1995), North and Thomas (1973), Dani Rodrik (2007), and many others. 2 The set of institutional arrangements that came to be labeled the “Washington Consensus” (Williamson 1990) was an attempt to specify a list of ten institutional arrangements that would optimize economic growth. However, the relatively poor results of those countries (particularly in Latin America) that tried to follow the Washington Consensus formula most closely (see Rodrik 2008; Stiglitz 2008) has led to considerable doubt about this particular development formula and has raised new questions about whether it is possible or useful to try to specify what institutions are good for growth.
