Understanding Underdevelopment: Challenges for Institutional Economics from the Point of View of Poor Countries

In this paper we focus on a few broad analytical themes that have not been paid enough attention in the theoretical institutional economics literature: in particular, (a) the process of persistence of dysfunctional institutions in poor countries, (b) institutional impediments as strategic outcomes of distributive conflicts, (c) the collective action problems these conflicts exacerbate, and (d) in view of the critical need for coordination, a more complex and nuanced role of the state, which many (though not all) states fail to perform.