Explaining Institutional Innovation tries to understand how and why successful institutions arise—that is, institutions that bring about efficient results and stimulate economic growth. The collection emerged out of a workshop held at the University of Havana in 2006 and focuses on developing countries, containing case studies from South American, Caribbean, and East Asian contexts.
The case studies share common theoretical reasoning: crises or events that leave political leaders vulnerable precede and consequently stimulate institutional change. The “systematic vulnerability” argument posits that efficient institutions arise after two conditions are met. Political leaders must feel that they are confronted with a threat and must also have inadequate resources to deal with it. Second, under these circumstances, institutions evolve to assist in creating the resources necessary to tackle the perceived threat. The authors set out to demonstrate the validity of the theory through seven case studies of institutional innovation, examining economic institutions, business...
