Path Dependence, Development, and the Dynamics of Institutional Reform

In the past decade, an institutional perspective on development has become increasingly prominent in development thinking. However, the reform experience thus far suggests that if institutions indeed matter for development, we still do not have a firm understanding of how to transforms dysfunctional institutions. Drawing on concrete examples of rule of law and property rights reforms, we argue that path dependence theory can shed some light on past failures and provide guidance for future reforms.