HOW DO WE GET THE INSTITUTIONS RIGHT? THE CONDITIONS

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How do we get the institutions right


How do we get the institutions right?

The conditions for institutional effectiveness.

Cheryl Boudreau and Nicholas Weller


Over the last few decades, scholars have devoted considerable attention to studying how institutions affect economic growth, policy outcomes, political behavior, and democratic stability (North 1990, Knack and Keefer 1995, Lupia and McCubbins 1998, Linz and Stepan 1996). Regardless of the particular question of interest, however, these scholars all argue that institutions play a significant role in shaping macro-level outcomes.

Although much of this literature explores the macro consequences of institutions, it often ignores or oversimplifies the micro foundations that underpin institutional effectiveness. For instance, for institutions to generate economic growth they must change actors’ levels of trust (Zak and Knack 1998). While we do not minimize the difficulty of implementing or changing policies, we argue that much less is known about how and when institutions affect behavior than is acknowledged typically. Because institutions have their affect through changing micro-level behavior such as trust, learning, and cooperation, we argue that understanding how and when institutions affect behavior is crucial to getting the institutions “right” and ultimately changing macro-level phenomena, such as economic growth and voter competence.

In this paper we introduce a set of necessary conditions an institutions must meet to affect individual behavior, and therefore be considered an “effective institution.” These conditions suggest there are rather narrow circumstances under which we should expect institutions to change people’s behavior. After outlining our theory of effective institutions, we discuss a number of empirical results from experiments in economics and political science that suggest institutional effectiveness only occurs under specific circumstances and may be harder to achieve than the literature often suggests.



Biography of Nicholas Weller

Nicholas Weller is a third-year graduate student in the UC-San Diego political science. Weller graduated from Rice University in 1999 with a double major in history and policy studies. His research is on the effect of institutions on political and economic outcomes, specifically on the interaction between cognition and institutions. Between graduating from Rice University and starting graduate school at UCSD, he spent one year working as a Volunteer in Service to America (VISTA) and over two years as the education policy analyst at Cascade Policy Institute.



Biography of Cheryl Boudreau

Cheryl Boudreau is a Ph.D. candidate in the department of political science at the University of California, San Diego. She received her undergraduate degree from Washington University in St. Louis, where she majored in psychology and political science. Her research interests include political behavior, law, and experimental methods. Specifically, her research integrates theories of learning from cognitive science into analyses of how voters and jurors make decisions. Her coauthored publications include “Statutory Interpretation and the Intentional(ist) Stance” and “The Judge as a Fly on the Wall: Interpretive Lessons from Positive Theories of Communication and Legislation.”



Progress on paper

We have finished most of the experiments on which the empirical section of the paper is based. We also have an initial draft of the paper that is nearly complete.


Faculty familiar with paper

Professor Mathew McCubbins very familiar with the paper’s arguments and progress.



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