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Understanding “Development”: Insights from Some Aspects of Complexity Theory

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  • Christopher A. Hartwell

    (Kozminski University
    CASE - Center for Social and Economic Research)

Abstract

Complexity theory allows for a non-equilibrist approach to the economy, an approach that is shared by new institutional economics. Drawing on lessons from both schools of thought, this paper examines institutions as their own complex adaptive systems, even as they are nested in larger institutional systems and the broader economy. Tracing the evolution of an economy as the sum of its institutional parts, I examine the idea of development as the improvement of institutions. The key finding of this examination is that some aspects of complexity theory, relying on institutional and Austrian approaches, actually come full circle to a neoclassical prescription of laissez-faire in regard to institution-building. Given the complexity of both institutions and institutional systems, it is may be more important to remove political and other barriers from the path of institutional development than to actively engage in institution-building in order to encourage development. This too, unfortunately, faces challenges as a result of complexity.

Suggested Citation

  • Christopher A. Hartwell, 2017. "Understanding “Development”: Insights from Some Aspects of Complexity Theory," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 34(2), pages 165-190, November.
    • Handle: RePEc:spr:homoec:v:34:y:2017:i:2:d:10.1007_s41412-017-0050-7
    DOI: 10.1007/s41412-017-0050-7
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    2. Fernanda Cimini & Jorge Britto & Leonardo Costa Ribeiro, 2020. "Complexity systems and middle-income trap: the long-term roots of Latin America underdevelopment [Sistemas complexos e armadilha da renda media: as raízes de longo prazo do subdesenvolvimento latino-a," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 30(spe), pages 1225-1256, December.
    3. Frolov, Daniil, 2019. "The manifesto of post-institutionalism: institutional complexity research agenda," MPRA Paper 97662, University Library of Munich, Germany.
    4. Frolov, Daniil, 2018. "Постинституционализм: За Пределами Институционального Мейнстрима [Post-institutionalism: Beyond the Institutional Mainstream]," MPRA Paper 90287, University Library of Munich, Germany.
    5. Frolov, Daniil, 2019. "Постинституционализм: Программа Исследований За Пределами Институционального Мейнстрима [Post-institutionalism: research program beyond the institutional mainstream]," MPRA Paper 92328, University Library of Munich, Germany.

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    More about this item

    Keywords

    Institutions; Complexity theory; Growth; Equilibrium;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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