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Shahid Javed Burki - Beyond the Washington consensus: institutions matter

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This report examines the precise nature of the required institutional reforms needed to achieve higher sustained rates of growth and to make a dent in poverty reduction and provides a framework for their design and implementation. The more modest objective is to examine how the concepts of the new institutional economics are useful for analyzing and designing institutions and to evaluate how political economy concepts can be used to develop strategies for implementing institutional reforms. Employing some of these concepts, the report demonstrates that sound institutional reform can be technically and politically viable in the following key sectors: banking; capital markets and legal institutions; educational institutions; judicial reforms; and public administration.

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title Beyond the Washington Consensus Institutions Matter World Bank - photo 1

title:Beyond the Washington Consensus : Institutions Matter World Bank Latin American and Caribbean Studies. Viewpoints
author:Burki, Shahid Javed.; Perry, Guillermo.
publisher:World Bank
isbn10 | asin:0821342827
print isbn13:9780821342824
ebook isbn13:9780585218557
language:English
subjectLatin America--Economic policy, Caribbean Area--Economic policy, Economic stabilization--Latin America , Economic stabilization--Caribbean Area.
publication date:1998
lcc:HC125.B7665 1998eb
ddc:339.5/098
subject:Latin America--Economic policy, Caribbean Area--Economic policy, Economic stabilization--Latin America , Economic stabilization--Caribbean Area.
Page i
WORLD BANK LATIN AMERICAN AND CARIBBEAN STUDIES
VIEWPOINTS
Beyond the Washington Consensus: Institutions Matter
by Shahid Javed Burki
and Guillermo E. Perry
Beyond the Washington consensus institutions matter - image 2
Page ii
Copyright 1998
The International Bank for Reconstruction
and Development/THE WORLD BANK
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First printing September 1998
Third printing September 1999
The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries.
The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A.
Shahid Javed Burki is vice president and Guillermo E. Perry is chief economist of the World Bank's Latin America and the Caribbean Regional Office.
Cover illustration by David McLimans
Burki, Shahid Javed.
Beyond the Washington consensus : institutions matter / by Shahid
Javed Burki, Guillermo E. Perry.
p. cm. (World Bank Latin American and Caribbean studies.
Viewpoints)
Includes bibliographical references.
ISBN 0-8213-4282-7 (alk. paper)
1. Latin AmericaEconomic policy. 2. Caribbean AreaEconomic
policy. 3. Economic stabilizationLatin America. 4. Economic
stabilizationCaribbean Area. I. Perry, Guillermo. II. Title.
III. Series.
HC125.B7665 1998 98-39051
339.5'098dc21 CIP
Page iii
CONTENTS
ACKNOWLEDGMENTS
vii
INTRODUCTION
1
PART 1. INSTITUTIONAL REFORM: WHY AND HOW
9
Chapter 1: Institutions Matter for Development
11
Picture 3
What Do We Mean by Institutions and Organizations?
11
Picture 4
Why Do Institutions Matter for Development?
12
Picture 5
Information and Enforcement Problems in a Market: The Financial Sector
13
Picture 6
Information and Enforcement Problems in Hierarchies: The Education Sector
14
Picture 7
Institutions Matter: The Evidence
15
Picture 8
Issues of Measurement and Some Illustrations
15
Picture 9
A Brief Review of Recent Empirical Studies
17
Picture 10
LAC's Progress in Institutional Development
17
Picture 11
Notes
24
Chapter 2: Institutional Reform Is Possible
25
Picture 12
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