Department of Economics
Institutions complementarity and coevolution
I sketch a framework of theoretical and empirical models to illustrate the interactions between government and market actors, and the resulting coevolution of related institutions. The choices and interactions of the rational actors, in addition to other stock variables, format the motivation matrix and determine the changes in economic outcomes and institutions. The changes accumulating over time reshape the institutional environment in subsequent periods. The empirical findings suggest that state variables, government policies and choices can generate virtuous or vicious spirals driving changes in institutions and the wellbeing of people for a long period of time. Understanding the mechanism is essential for building appropriate institutions and capacity to generate inclusive and sustained economic growth.
Effects and estimations, evolution mechanism, institutional changes
Source Publication Title
Malaysian Journal of Economic Studies
University of Malaya
Link to Publisher's Edition
Mo, Pak-Hung. "Institutions complementarity and coevolution." Malaysian Journal of Economic Studies 55.1 (2018): 133-150.