Tuesday, October 21, 2008

Baptists and Bootleggers Gone Wild

Robert Barro famously said that once you start thinking about economic growth, you cannot think about anything else. A corollary must be that once you start thinking about institutions (and how they succeed or fail with respect to growth), you can think of little else. The fascinating question is addressed by Martin Ricketts, Oliver Williamson, Erik Furubotn, Rudolf Richter, Elinor Ostrom and Stephen Litlechild in the Sept 2008 Economic Affairs.

Listening to all of the policy fixes that are wheeled out day and night by politicians and many others makes one wonder. Have they never heard of public choice economics? Have they never heard of Baptists and Bootleggers?

The various "fixes" generated by the political process are, by definition, politicized.

UPDATE: I should have cited Robert Lucas instead of Robert Barro. HT to Gabriel Mihalache.