Limited Access Orders in the Developing World: A New Approach to the Problems of Development

By D. North, J. Wallis, Steven B. Webb, Barry R. Weingast. 2007

382 citations recorded by the source corpus.

The upper-income, advanced industrial countries of the world today all have market economies with open competition, competitive multi-party democratic political systems, and a secure government monopoly over violence. Such open access orders, however, are not the only norm and equilibrium type of society. The middle and low-income developing countries today, like all countries before about 1800, can be understood as limited access orders that maintain their equilibrium in a fundamentally different way. In limited access orders, the state does not have a secure monopoly on violence, and society organizes itself to control violence among the elite factions. A common feature of limited access orders is that political elites divide up control of the economy, each getting some share of the rents. Since outbreaks of violence reduce the rents, the elite factions have incentives to be peaceable most of the time. Adequate stability of the rents and thus of the social order requires limiting access and competition-hence a social order with a fundamentally different logic than the open access order. This paper lays out such a framework and explores some of its implications for the problems of development today.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9c5e1d00caadac26fd534567b3e64429c0e5cb1e

Citations in the corpus

• The Political Economy of Myanmar’s Transition (2014, neutral): “…the economy is manipulated to create rents which are selectively dispersed to non-state actors to buy their loyalty and encourage co-operation (North et al. 2007).2 The retention of monopolies, trade and investment licences and arbitrary regulations was not simply “mismanagement,” but a…”