Contents

Abstract 968

Keywords 968

1. Introduction 969

2. What we know that (possibly) ain’t so 973

3. The indeterminate mapping from economic principles to institutional arrange­

ments 978

4.

4.1. In practice, growth spurts are associated with a narrow range of policy reforms 989

4.2. The policy reforms that are associated with these growth transitions typically combine ele­

ments of orthodoxy with unorthodox institutional practices 993

4.3. Institutional innovations do not travel well 994

4.4. Sustaining growth is more difficult than igniting it, and requires more extensive institutional

reform 996

5. A two-pronged growth strategy 997

5.1. An investment strategy to kick-start growth 998

5.1.1. Government failures 998

5.1.2. Marketfailures 999

5.1.3. Wheretostart? 1002

5.2. An institution building strategy to sustain growth 1005

6. Concluding remarks 1009

Acknowledgements 1010

References 1010

Handbook of Economic Growth, Volume 1A. Edited by Philippe Aghion and Steven N. Durlauf © 2005 Elsevier B.V. All rights reserved

DOI: 10.1016∕S1574-0684(05)01014-2