Over the past four decades, an influential group of economists have pioneered a new school of thinking, known as New Institutional Economics, focused on the role of institutions in economic development. Of these thinkers, Douglass North has been the most important influence in guiding development agencies such as the World Bank to focus on legal and judicial reform rather than technical economic issues. Carnegie hosted a critical reflection on North’s work with Julio Faundez.
The talk will reflect on questions, including:
- How does sustained institutional change occur, and what role does law play in this process?
- Why are formal laws often ineffective?
- Do modern constitutions matter?
- How do culture and ideology affect institutional development?
- What is the relationship between legitimacy and efficiency?
Drawing on his experience in law and governance from Chile, the UK, and around the globe, Faundez shared his insights. Rachel Kleinfeld moderated the discussion.
Julio Faundez teaches international economic law at the University of Warwick. Faundez is co-editor in chief of the Hague Journal on the Rule of Law, and editor of the book series Law, Development, and Globalization.
Rachel Kleinfeld is a senior associate in Carnegie’s Democracy and Rule of Law Program, with a focus on issues of security and governance. She is the founder and president emeritus of the Truman National Security Project.