Institutions and Economic Development

This book is a survey of the field of development studies from a political economy perspective. It first reviews the academic literature on development and highlights the fundamental importance of institutions and social values, over and above other alternative theories, as determinants in long-run development. In this context, the book draws from the works of Nobel Laureates Douglass North, F.A. Hayek and Elinor Ostrom, and argues that the ingredients of property rights, the rule of law, and market freedoms are essential in generating socio-economic progress.    

Successful reforms however are not simply a function of constructing formal institutions, but must cohere with the social values, norms, and cultural commitments of local communities. It is in this spirit that the book theorises on the oft-neglected role that political entrepreneurs play in driving endogenous institutional change. Specifically, this book integrates the theoretical discussion on market-driven development with a range of case studies from around the world, featuring the bottom-up efforts of local change agents to pursue institutional reforms and changes in social opinion. 

"This marvelous handbook displays an impressive grasp of the vast literature on economic development, highlighting the crucial role of liberal ideas of freedom for economic success. The handbook masterfully summarizes debates on free markets, institutions, and culture as causes of development. This is the best textbook treatment of liberalism and development that I have ever seen" —William Easterly, Professor of Economics at New York University (NYU) and Co-Director, NYU Development Research Institute

“Read this book and learn why countries that are rich are composed of people who are free to follow their own bottom-up rules of order in society and economy” —Vernon Smith, Nobel Laureate and Professor of Economics, Chapman University 

 "Cheang and Palmer offer a clear, lively and engaging introduction to the liberal perspective on one of the key questions in political economy: why are some nations richer, and more highly developed, than others? Their answer, which draws on the work of authors such as Douglass North, Friedrich Hayek, and Elinor Ostrom, emphasises the importance of trade, entrepreneurship and innovation, along with the ideas and institutions that facilitate such activities. This handbook will be read with profit by students of economic development, whether they are of a liberal persuasion or not" —Paul Lewis, Professor of Political Economy, King’s College London

 "Institutions and Economic Development by Bryan Cheang and Thomas Palmer is an outstanding tool for teaching economic development and political economy at both the undergraduate and graduate level. It is written in clear and straightforward prose so widely accessible, but also carefully researched and presents the various perspectives fairly and comprehensively. This work represents a great contribution to the literature, and should be widely adopted in classrooms and beyond" —Peter Boettke, Professor of Economics and Philosophy, George Mason University

 "What is the nature of economic development? What are its consequences? Answering these questions poses a vital task in a modern world which has achieved immense gains in living standards over recent generations but is yet to entirely throw off the vestiges of material deprivation. In this book, Bryan Cheang and Tom Palmer present an unremittingly liberal vision of economic development. They illustrate the profound contributions of human agency and enterprise toward economic development, powerfully revealing how freedom underpins productive forces of change. Cheang and Palmer further explain how the freedom to develop is best secured within a quality institutional framework of laws and norms constraining political domination and exploitation. This Classroom Companion is an indispensable, state-of-the-art source outlining a humane pathway to development, one that secures a more prosperous andjust world for all" —Mikayla Novak, Senior Fellow, Mercatus Center

Bryan Cheang is the Assistant Director and Research Fellow at the Centre for the Study of Governance and Society (CSGS) at King’s College London, where he obtained his PhD in Political Economy. His research interests include varieties of capitalism, the governance of East Asian societies, industrial policy, and the importance of value pluralism in the management of cultural particularism. He is also the author of Economic Liberalism and the Developmental State: Comparing Hong Kong and Singapore's Post-War Development, recently published by Palgrave Macmillan. 

Tom G. Palmer is executive vice president for international programs at Atlas Network where he holds the George M. Yeager Chair for Advancing Liberty. He is also a senior fellow at Cato Institute. He has travelled extensively to work with NGOs promoting liberal democracy and locally-led economic development. He has also published in journals such as the Harvard Journal of Law and Public Policy, Foreign Policy, Ethics, Critical Review, Global Policy, Eurasia Review, and Constitutional Political Economy. He is the author of numerous books, including (with Matt Warner) Development with Dignity (2022), and (with William A. Galston) Truth and Governance: Religious and Secular Views (2021).