(Ignoring) the Prosperity Playbook. Issue 5 (19th October 2016)

• Record Type: Journal Article
• Authors: Menaldo, Victor
• Is Part Of: International trade journal. Volume 30:Issue 5(2016)
• Page Start: 366
• Page End: 377
• Publication Date: 2016-10-19
• Subjects: Development -- financial repression -- institutions -- natural resource dependence -- political economy -- state capacity -- transaction costs; International trade -- Periodicals; Commerce -- Periodicals; International economic relations -- Periodicals; 382
• DOI: 10.1080/08853908.2016.1203381
• Languages: English
• ISSNs: 0885-3908

Abstract

ABSTRACT: Why are some countries poor? It comes down to good governance: secure property rights and policies that reduce transaction costs. In turn, this means the rule of law: limits on executive authority and a government that impartially enforces contracts, and thus abstains from picking winners. It also means a government that solves market failures. Yet the governments of developing countries often do the opposite. The proximate reasons are the endurance of state monopolies, policies that cripple the rural sector, and an over-dependence on natural resources. The deeper reason is rulers' need to raise revenues in short order to survive.