Issues of institutional persistence and institutional changes
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Date
2023
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Ivane Javakhishvili Tbilisi State University Press
Abstract
The issue of institutional persistence and institutional changes is one of the relevant parts of
institutional economics. Institutional changes aim to adapt new challenges. Herewith, as for the persistence
of institutions, it is important to encourage economic development. However, we should note
that the institutions, which persist over time, in particular, can no longer support changes and economic
development. The paper analyzes the factors that prevent institutional change, give a push to
inertia and reduce the potential of systemic development.
Analysis of the issue revealed that among other factors, three important mechanisms determine
the sustainability of institutions. These are - geography, culture and history. In addition, the simplest
form of institutional stability is ~institutional stasis,~ which implies that the maintenance of
existing institutions is because ~power begets power.~ This means that existing institutions currently
allow powerful groups to continue to dominate, so that those groups in turn may choose to maintain
those institutions. However, ultimately, all authors agree that despite such examples, institutional
stasis is rare; most institutions are constantly changing, and institutional change is an integral part of
the economic development.1. Acemoglu, Daron, Georgy Egorov and Konstantin Sonin. 2021. “Institutional change and institutional
Persistence.” NBER Working Paper No. 27852
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Review 91(4):938–963.
3. Acemoglu, Daron and James A Robinson. 2006b. Economic Origins of Dictatorship and Democracy.
Cambridge University Press.
4. Acemoglu, Daron and James A Robinson. 2001. “A Theory of Political Transitions.” American Economic
Review 91(4):938–963.
5. Acemoglu, Daron and James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity, and
Poverty. New York: Crown Publishers.
6. Bertocchi, G. and Canova, F. (2002) “Did Colonization Matter for Growth: An Empirical Exploration into the
Historical causes of Africa’s Underdevelopment” European Economic Review. 46, 1851-1871.
7. Diamond, J. (1997) Arms, Germs and Steel. W. W. Norton.
8. Engerman, S. and Sokoloff, K. (1997) “Factor Endowments, Institutions and Differential Paths of Growth
among New World Economies: A View from Economic Historians of the United States”, in S. Haber, Ed.
How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico. Standford
University Press.
9. Engerman, S. and Sokoloff, K. (2005) “The Evolution of Suffrage Institutions in the New World” Journal of
Economic History. 65, 891-921.
10. Fernandez, R. (2010) “Does Culture Matter?” Working Paper, Department of Economics, New York
University.
11. Fischer, Stanley. 1994. Russia and the Soviet Union Then and Now. University of Chicago Press pp. 221–258.
12. Fishman, R. and Miguel E. (2007) “Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic
Parking Tickets” Journal of Political Economy. 115, 1020-1048.
13. Gallup, J. and Sachs, J. (1999) “Geography and Economic Development”. Working Paper N1, Center for
International Development.
14. Grier, R. (1999) “Colonial Legacies and Economic Growth” Public Choice. 98, 317-335.
15. Guiso, L; Sapienza, P and Zingales: L. (2006) “Does Culture Affect Economic Outcomes?” Journal of
Economic Perspectives. 20, 23-48.
16. Guiso, L; Sapienza, P and Zingales: L. (2009) “Cultural Biases in Economic Exchange” Quarterly Journal of
Economics. 124, 1095-1131.
17. Jellema, J. 92010) “Culture and Development” Mimeo.
18. Landes, D. (2006) “Why Europe and the West? Why Not China?” Journal of Economic Perspectives. 20, 3-22.
19. Licht, A; Goldschmidt, C; nd Schwarts, S. (2007) “Culture Rules: The Foundations of the Rule of Law and
other Norms of Governance” Journal of Comparative Economics. 35, 659-688.
20. Mahoney, James. 2000. “Path dependence in historical sociology.” Theory and society 29(4):507–548.
21. Papava, V. On the Shadow Political Economy of the Post-Communist Transformation. An Institutional
Analysis. Problems of Economic Transition, Vol. 40, No. 6, 1997 (co-author N.Khaduri).
22. Kakulia, N., Lazarashvili, T. (2019). Institutional transformation and its challenges in Georgia. Ivane
Javakhishvili Tbilisi State University, The collection of The 4th International Scientific-Practical
Conference Materials, 173-178 (In Georgian).
Description
1. Acemoglu, Daron, Georgy Egorov and Konstantin Sonin. 2021. “Institutional change and institutional
Persistence.” NBER Working Paper No. 27852
2. Acemoglu, Daron and James A Robinson. 2001. “A Theory of Political Transitions.” American Economic
Review 91(4):938–963.
3. Acemoglu, Daron and James A Robinson. 2006b. Economic Origins of Dictatorship and Democracy.
Cambridge University Press.
4. Acemoglu, Daron and James A Robinson. 2001. “A Theory of Political Transitions.” American Economic
Review 91(4):938–963.
5. Acemoglu, Daron and James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity, and
Poverty. New York: Crown Publishers.
6. Bertocchi, G. and Canova, F. (2002) “Did Colonization Matter for Growth: An Empirical Exploration into the
Historical causes of Africa’s Underdevelopment” European Economic Review. 46, 1851-1871.
7. Diamond, J. (1997) Arms, Germs and Steel. W. W. Norton.
8. Engerman, S. and Sokoloff, K. (1997) “Factor Endowments, Institutions and Differential Paths of Growth
among New World Economies: A View from Economic Historians of the United States”, in S. Haber, Ed.
How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico. Standford
University Press.
9. Engerman, S. and Sokoloff, K. (2005) “The Evolution of Suffrage Institutions in the New World” Journal of
Economic History. 65, 891-921.
10. Fernandez, R. (2010) “Does Culture Matter?” Working Paper, Department of Economics, New York
University.
11. Fischer, Stanley. 1994. Russia and the Soviet Union Then and Now. University of Chicago Press pp. 221–258.
12. Fishman, R. and Miguel E. (2007) “Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic
Parking Tickets” Journal of Political Economy. 115, 1020-1048.
13. Gallup, J. and Sachs, J. (1999) “Geography and Economic Development”. Working Paper N1, Center for
International Development.
14. Grier, R. (1999) “Colonial Legacies and Economic Growth” Public Choice. 98, 317-335.
15. Guiso, L; Sapienza, P and Zingales: L. (2006) “Does Culture Affect Economic Outcomes?” Journal of
Economic Perspectives. 20, 23-48.
16. Guiso, L; Sapienza, P and Zingales: L. (2009) “Cultural Biases in Economic Exchange” Quarterly Journal of
Economics. 124, 1095-1131.
17. Jellema, J. 92010) “Culture and Development” Mimeo.
18. Landes, D. (2006) “Why Europe and the West? Why Not China?” Journal of Economic Perspectives. 20, 3-22.
19. Licht, A; Goldschmidt, C; nd Schwarts, S. (2007) “Culture Rules: The Foundations of the Rule of Law and
other Norms of Governance” Journal of Comparative Economics. 35, 659-688.
20. Mahoney, James. 2000. “Path dependence in historical sociology.” Theory and society 29(4):507–548.
21. Papava, V. On the Shadow Political Economy of the Post-Communist Transformation. An Institutional
Analysis. Problems of Economic Transition, Vol. 40, No. 6, 1997 (co-author N.Khaduri).
22. Kakulia, N., Lazarashvili, T. (2019). Institutional transformation and its challenges in Georgia. Ivane
Javakhishvili Tbilisi State University, The collection of The 4th International Scientific-Practical
Conference Materials, 173-178 (In Georgian).
23. Kakulia, Nazira & Zhghenti, Tsotne. (2019). Institutional-Determinants-of-Economic-Growth-in-Georgiaand-
in-Other-Post-Communist-Economies. World Academy of Science, Engineering and Technology
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25. Sachs, J (2003) ‘Institutions Don’t Rule: Direct Effects of Geography on Per Capita Income” NBER Working
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28. Treisman, Daniel. 2011. The Return: Russia’s Journey from Gorbachev to Medvedev. Free Press.
29. Thelen, Kathleen. 1999. “Historical institutionalism in comparative politics.” Annual review of political
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Keywords
Citation
Conference Proceedings: "The World Economy in the Post-Pandemic Period: Implications and Challenges", Tbilisi, 2023, pp. 132-137