Institutions and Economic Performance

Those who analyze political institutions often employ broad labels. They refer to democracy or authoritarianism; presidential or parliamentary governments; or to systems of plurality or proportional representation. In this paper, I refrain from addressing politics at this level and adopt an approach that is far more micro-in perspective. The approach I take can be referred to as " neo-classical, " with the attributes that the name implies: rationality in choice, an emphasis on the individual decision maker, and an explicit treatment of the process by which individual actions aggregate into collective – in this case, policy – outcomes. Several considerations underlie the adoption of this approach to the analysis of institutions. It is often difficult to reason from the macro-level attributes of political institutions to the content of public policies. Are, for example, democracies more likely to adopt liberal economic policies than are authoritarian regimes? There are few ways to achieve purchase on this issue, with the result that multiple lines of argument can – and