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Fostering Civil Society to Build Institutions: Why and When

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Author Info
Peter Grajzl () (Department of Economics, Central European University)
Peter Murrell () (Department of Economics, University of Maryland)

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Abstract

We revisit the ubiquitous claim that aiding civil society improves institutional outcomes. In our model, a vibrant civil society initiates public debate in a reform process that would otherwise be dominated by partisan interest groups and politicians. By altering the incentives of interest groups submitting institutional reforms, civil society involvement sometimes solves adverse selection problems that arise because interest groups are better informed than politicians. Because aid increases the cost to the politician of excluding civil society, it affects institution-building. We show that the welfare implications of fostering civil society critically depend on the specifics of local politics, thereby casting new light on the experience of civil society aid in post-communist and developing countries. Our analysis uncovers a particularly disturbing instance of the tragedy that aid can be counter-productive where institutions are poor. An empirical application shows how the impact of civil society aid varies with the level of democracy.

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Publisher Info
Paper provided by University of Maryland, Department of Economics in its series Electronic Working Papers with number 08-002.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 56 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:umd:umdeco:08-002

Contact details of provider:
Postal: Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
Web page: http://www.econ.umd.edu/

Order Information:
Postal: Ms. Elizabeth Martinez, Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
Email:

For technical questions regarding this item, or to correct its listing, contact: (Peter Murrell).

Related research
Keywords: civil society; institutional reform; civil society aid; interest groups; post-communist countries; developing countries;

Find related papers by JEL classification:
D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
F35 - International Economics - - International Finance - - - Foreign Aid
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
P50 - Economic Systems - - Comparative Economic Systems - - - General

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This page was last updated on 2009-10-18.


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