Growth and institutional changes:

Vol. 41 No. 2 (2021)

Apr-Jun / 2021
Published March 30, 2021
PDF-English
PDF-English

How to Cite

Morselli, Alessandro. 2021. “Growth and Institutional changes:: A Historical Evolution”. Brazilian Journal of Political Economy 41 (2), 292-313. https://doi.org/10.1590/0101-31572021-3133.

Growth and institutional changes:

a historical evolution

Alessandro Morselli
Professor of International Economic Policy, University of Rome Unitelma Sapienza, Rome, Italy.
Brazilian Journal of Political Economy, Vol. 41 No. 2 (2021), Apr-Jun / 2021, Pages 292-313

Abstract

This paper highlights the fact that neoclassical theory cannot explain the process of economic change. In an uncertain and ever-changing world, a theory based on static equilibrium models is of little help. Whereas we have placed the institutions at the centre of the understanding of economic systems, since they constitute their incentive structure. Thus, economic change is largely an intentional process created by individuals’ perceptions of the consequences of their actions. These perceptions, coming from the beliefs of individuals, combine with their preferences. In the end, a dynamic theory of economic change will not be built, but an attempt will be made to understand the link between institutions and economic growth, the process of change, and to develop assumptions, within its limits, capable of improving the human environment and economic results.

JEL Classification: B15; B25; B52.


Keywords: Institutional change, beliefs, growth, uncertainty, institutions, rationality, game theory