Institutional Uncertainty (In Spanish)

34 Pages Posted: 17 Nov 2010

See all articles by Pedro P. Romero

Pedro P. Romero

Universidad San Francisco de Quito - USFQ, School of Economics; Experimental and Computational Economics Lab -ECEL (USFQ)

Date Written: May 15, 2010

Abstract

What is institutional uncertainty? What is its origin? And, how this uncertainty affects production decisions? This paper presents a survey of the economic literature, both empirical and theoretical, that has addressed these questions. Two related hypotheses are introduced and confronted with available data. Firstly, institutional uncertainty underlies economic uncertainty in society, bringing about a negative incentive to produce. The second hypothesis claims that institutional uncertainty is a consequence of the process by which roving coalitions capture the power of the state. They do so to increase their permanent rents by depredating state’s resources while in power. In order to stay in power these coalitions impose discriminatory reforms to favor or harm different groups in society.

Note: Downloadable document is in Spanish.

Keywords: Institutions, Institutional Uncertainty, Incentives, State Capture

JEL Classification: O57, D72

Suggested Citation

Romero, Pedro, Institutional Uncertainty (In Spanish) (May 15, 2010). Available at SSRN: https://ssrn.com/abstract=1710315 or http://dx.doi.org/10.2139/ssrn.1710315

Pedro Romero (Contact Author)

Universidad San Francisco de Quito - USFQ, School of Economics ( email )

Diego de Robles y Vía Interoceánic
Campus Cumbayá
Quito, Pichincha 17-1200-84
Ecuador

Experimental and Computational Economics Lab -ECEL (USFQ) ( email )

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