Explaining Institutional Innovation : Case Studies from Latin America and East Asia

Many believe that economic development is primarily a function ofinstitutions that help societies reap potential gains from interdependent actors.The norms, rules, and organizations that "govern" transactions are meant to resolvethe collective action problems at the heart of economic development. Recognitionthat institutions are key to economic growth and to the distribution of resources isreflected not only in scholarly literature on property rights and public agencies,but also in the advice of development agencies that encourage the construction ofpro-market institutions. Yet claims that "institutions matter" begs an importantquestion: Where do "good" institutions (those that facilitate efficient andequitable outcomes) come from and why do they evolve the way they do?Explaining Institutional Innovationexplores these issues, adopting the argument that institutional innovation requires"tough times" during which leaders see themselves as highly vulnerable to internalpressures and external threats yet lack the means to address them. Analyzingbusiness associations and states in Latin America, private sector organizations inChina, the Office of the Historian of Havana, the Association of Caribbean States,Caribbean universities, and sugar industries in Southeast Asia, the contributorsaffirm the vulnerability approach by demonstrating how various types of crisesprecede and stimulate institutional changes. Also, by highlighting the impact ofsuch factors as more proximate political arrangements and structures of elitepolitical competition, contributors suggest further avenues for institutionalanalyses.