Economic change from an institutional perspective

I have three goals in this chapter. First, I will briefly summarize some of the unforeseen challenges to institution building for economic growth. Second, on a more positive note, I will highlight unexpected development outcomes: the emergence of bottom-up institutional changes, and the development and viability of second-best institutions. Both developments rely on private actors rather than state actors. Third, I will highlight recent work exploring how social context, networks, and local culture influence these institutional transitions.