Institutions, Governance and Policy Reform

The literature on institutions and development has dealt with questions of grand design such as the Constitution, the rule of law (personal safety), property rights and informal rules embodied in culture. These are matters that happen on a time scale of a quarter/half century or more and can be thought of as the 'superstructure' of institutions. The quantitative work on institutions and growth has explored the linkage between these institutional issues and economic growth. The current paper focuses on what may be called the 'microstructure' of institutions, a smaller scale at which change can occur over a time frame of decades (or half decades). Among the issues that arise in this context are how changing institutions require changes in policies.