"Institutions and Economic Growth: Making Sense of the Relationship"
Wednesday, October 18, 2006 - 12:00am
Richard R. Nelson Columbia University
There now is widespread agreement among economists that having the right institutions is the key to a nation's economic productivity and progressiveness. However, if one looks behind this apparent consonance of understandings, one can see that there is far from unanimity regarding just what the term “institutions” is supposed to mean, or about the way that institutions relate to economic growth, or about how a nation can get the right set of institutions. In short, the term “institutions” presently seems to be serving as a “placeholder” in the evolving theory of economic growth, much as the term “total factor productivity” did a number of years ago. The objective of this essay is to propose a way of conceptualizing what institutions are, how they relate to economic activity, and how they change over time, that in my view has the promise of making sense out of a growth theory in which institutions play the key role.
About Richard R. Nelson
Richard R. Nelson is George Blumenthal Professor of International and Public Affairs, Business, and Law (Emeritus) and, presently, Director of the Center for Science Technology and Global Development at The Earth Institute, Columbia University, New York, New York.
His research has concentrated on the processes of long-run economic change, with particular emphasis on technological advances and on the evolution of economic institutions. Some of his publications include The Sources of Economic Growth, (Harvard University Press, 2000), The Sources of Industrial Leadership (Cambridge University Press, 1999), National Innovation Systems: A Comparative Analysis (Oxford University Press, 1993), and An Evolutionary Theory of Economic Change, (Harvard University Press; Reprint edition, 1985).
Professor Nelson holds a BA from Oberlin College. He obtained his PhD in 1956 from Yale University. From 1956 to 1957 he was an Assistant Professor at Oberlin College, and from 1968 to 1986 a Professor at Yale University. He has also served as an Economist at The Rand Corporation (1957-1960, 1963-1968), a Senior Member at the Council of Economic Advisers (1961-1963). Between 1981 and 1986 he was appointed the Director of the Institute for Social and Policy Studies.