Dan Banik and Shiping Tang discuss the pivotal role of institutions in shaping and influencing economic development.
Development implies not just growth over a significant period of time but also progressive changes in the structure of an economy. Many influential scholars have identified the crucial role of property rights and the importance of constraining the power of the state while others highlight the importance of political settlements, development clusters, and inclusive economic and political institutions.
Shiping Tang is Fudan Distinguished Professor and Dr. Seaker Chan Chair Professor at the School of International Relations and Public Affairs at Fudan University, China. In his latest book, The Institutional Foundation of Economic Development: A systemic account of how institutions shape economic development, he argues that institutions play a pivotal role in shaping and influencing economic development through four key factors: possibility, incentive, capability, and opportunity. In addition, his framework encompasses six significant dimensions: political hierarchy, property rights, social mobility, redistribution, innovation protection, and equal opportunity. Sustained economic development, however, necessitates not only a robust institutional foundation but also strong state capacity and well-crafted socioeconomic policies.
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