Part I: Concepts — a dynamic typology

Part I introduces the dynamic typology around which the book is organized. The typology comprises a parsimonious set of divergent trajectories through which countries evolve from low to high incomes, and from weaker to stronger governance institutions. It distinguishes among countries along two dimensions of governance: whether their polities are dominant or competitive; and, within each of these, whether the rules of the game center around personalized deal-making or the impersonal application of the rule of law.

The resulting framework can be put to work in two ways. One way is to view each of the country-types as a world unto itself — each comprising a distinctive platform for development, with distinctive incentives for the participants, distinctive constraints and risks, and distinctive frontier challenges. Careful attention to these incentives and constraints provides a platform for identifying specific ‘good fit’ policy actions which are both worthwhile and feasible, given country-specific institutional realities.

A complementary approach is to view the framework from a dynamic perspective – with the focus less on distinctive governance patterns of incentive and constraint, and more on how governance and growth interact. This longer-run perspective can usefully be framed in terms of three phases of a virtuous circle: initiating change; building momentum; and sustaining momentum over time. While virtuous circles unfold differently along each of the dominant and competitive trajectories, the interactions between governance and growth which propel forward movement are akin to a snowball which builds in size as it rolls down a hill. As long as momentum can be sustained, by the time the snowball gets to the bottom of the hill it will have built formidable power, irrespective of where it started.

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