The Institutions of Economic Growth: A Theory of Conflict Management in Developing Countries

The Institutions of Economic Growth: A Theory of Conflict Management in Developing Countries

Copyright Date: 1972
Pages: 292
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  • Book Info
    The Institutions of Economic Growth: A Theory of Conflict Management in Developing Countries
    Book Description:

    Nations undergoing rapid economic growth require new institutions-both formal organizations and informal modes of interpersonal behavior. John Powelson develops a theory of institution-building to explain how nations choose such institutions, what kinds they prefer and why, and in what ways the institutions' effectiveness (essentially, their conflict-resolving capacity) may be measured.

    Originally published in 1972.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-7076-9
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
    • CHAPTER 1 Introduction and Summary
      (pp. 3-30)

      Nations experiencing rapid economic growth require new institutions—both formal organizations and informal modes of interpersonal behavior. Especially is this so if growth has increased, become continuous, or recently come to be regarded as a national goal.

      How do such nations choose their new institutions? Which institutions are discarded? Is there indeed a choice, in that different institutions might alternatively perform thesamefunctions? Are there any common trends, or similarities, in the institutions that one nation selects to performdifferenttasks? How can such similarities be classified? How can the effectiveness of institutions in performing their assigned tasks be...

    • CHAPTER 2 Conflict
      (pp. 31-57)

      Adam smith’s famous dictum, that the division of labor is limited by the size of the market, tells only half the story. The division of labor is also limited by the capacity of people to cooperate. Though Smith was surely aware of this second limitation, he did not stress it. The two constraints do not exert equal force, and one may arrest while the other is in excess capacity. In the England of the industrial revolution, the size of the market no doubtwasthe limiting force. In the less-developed world of today, it is not.

      Had Smith recognized the...

    • CHAPTER 3 The Consensus Society: Definitions and Problems of Measurement
      (pp. 58-108)
      William Loehr

      In Chapter 1 we proposed that all more developed countries, whether socialist, capitalist, or mixed, display two characteristics in common: consensus on economic growth as a dominant goal, and consensus on a set of dominant values whose object is to resolve conflicts arising out of growth. We argued that coercive societies have historically been unable to maintain growth over long periods; only a consensus society can sustain it. In Chapter 2 we set forth the necessity for conflict-resolving institutions, and we distinguished among goals (immediate and ultimate), conflicts (constructive and destructive), moves (+,+ and -\-,—), and solutions (physical and...

    • CHAPTER 4 A Micro-Theory of Institution-Building
      (pp. 109-138)

      We turn now to the theory of institutions. What institutions are selected in economic growth, what functions (conflicts) are assigned to each, and what are the principles by which the selection is made?

      The problem has micro and macro aspects. The micro concerns the individual institution, with the framework of national values given. The macro concerns the formation of new values and institution-types to which the individual institution will conform. We treat the micro in the present chapter and leave the macro for Chapter 5.

      We now take up the micro in the following way. First, we demonstrate by example...

    • CHAPTER 5 A Macro-Theory of Institution-Building
      (pp. 139-192)

      Because of its greater time-perspective, the macro-theory of institution-building permits a broader focus than the micro-theory. While the choice between institution A and institutionBstill interests us, we transfer our emphasis to institution types, and we relate these in turn to national values, now variable in the long run. We surmise that if an institution of one type is chosen, the probability will increase that another of the same type will follow. Thus if one industry is nationalized, it is easier (cheaper) to nationalize another. If legal disputes are settled by juries, it is easier to establish arbitration boards...

    • CHAPTER 6 The Effectiveness of Economic Planning
      (pp. 196-214)

      The concept of institutional effectiveness ought—I believe—to influence the manner in which economic planning is undertaken, the macro-plans formed and the projects analyzed. We now turn to this concern, and select Latin America as our area of attention.

      After a decade of the Alliance for Progress, there is widespread dissatisfaction with the state of economic planning in Latin America. In June 1969 a report to a ministerial-level meeting of the Inter-American Economic and Social Council stated the following:

      It is repeatedly discovered that long-term plans were either not put into effect, or they were implemented officially for only...

    • CHAPTER 7 Toward a Social-Science Model of Economic Growth
      (pp. 215-252)

      For growthmen, the pot of gold at the end of the rainbow is a complete theory of societal development. It would be at the same time both a theory of history and a theory of the social system. It would draw on all the social and behavioral sciences, and even these would not be enough; the humanities and physical sciences would have to participate as well. Despite the compelling works of Toynbee and Parsons, whose disciples may believe they have come close to such a theory, nevertheless the dream is so elusive that most would argue that it will never...

    • CHAPTER 8 The Landing
      (pp. 253-262)

      It is now time to retrench. We have argued for a social-science model based on the presumption that economic growth is infinite. Yet it is unbelievable that growth should continue forever. The absurdity of the notion is evident if we ponder the exponential rates of growth implied by the Harrod-Domar and successive models, for such might also be the equilibrium rates of our own proposed social-science model. While such a model might do for the time being, nevertheless we cannot propose that it would be valid forever.

      But what are the limits to growth? Were the classical economists right in...

  6. APPENDIX A Postscript on United States Policy Toward Latin America
    (pp. 263-276)
  7. INDEX
    (pp. 277-281)