Institutions and Economy

News Today 18.10.2022

Economists worldwide would agree that differences in institutions serve as the main determinants of prosperity among countries. There is also enough empirical evidence to show that some countries undergo political transitions and reform their institutions to move into enduring paths of economic development. Douglas North (1990) in his book “Institutions, Institutional Change and Economic Performance” defines institutions as the “rules of the game in a society”. As early as the eighteenth century, Adam Smith in his “Wealth of Nations” noted the importance of a system of justice, private property rights and the Rule of Law. (Read More)

In the last decade or so, there has been a renewed urge to implement the reform process. India has reaffirmed its policy to follow fiscal prudence, with a new time path for reducing the national fiscal deficit to 3 per cent of GDP. The industrial policy continues to be liberal with a strengthened emphasis on “ease of doing business”. Openness in foreign trade, a liberal environment to attract FDI, opening up of new areas such as defence and raising the equity cap on insurance have been some of the marked features of the strengthened reform process. (Read More)

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