Review Article: Good Governance, Institutions and Economic Development: Beyond the Conventional Wisdom

This article reviews comparative research on institutions and economic performance, identifying analytical gaps in the political economy of growth literature. It also examines core assumptions underpinning the good-governance approach to development. Contrasting experiences of conceptual and policy issues in East Asia and Latin America are discussed. The author suggests future scholarship in this field should distinguish between the rules and the play of the game; move beyond the property rights approach to development; stress the distributional, endogenous nature of institutions; investigate the role of informal constraints and human learning; and consider sources of credible commitment and self-enforcing growth. Focusing on some uncertainties in the accepted wisdom on good governance and development, this article furthers the consolidation of research on the political foundations of prosperity.