Institutional Uncertainty (In Spanish)
34 Pages Posted: 17 Nov 2010
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: Suggested Citation
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