Institutions, Interventions, and Economic Growth: Issues of Relevance and Measurement

Abstract: This work derives from the debates on economic development – the relation between the institutions and economic growth, the importance and the boundaries of the institutional, the economic ‘receipts’ on reforms and policies, such as the ‘Washington consensus’. While some scholars support the idea of the importance of the institutions for the economic growth, other distrust it, or at least reflect on the question which institutions ‘matter’ more, and what can be the metrics here, proposing, for example, to measure the ‘elasticity of the institutions.’ The additional complexity of the issue is due to the blurred boundaries of the institutional and non-institutional, the problem of path dependence, and unclear, uncontested reflection on the past reforms and the lessons that could derive from them. Case studies of Russian and Poland are reviewed as a source of knowledge on economic development and further better solutions. An attempt to compare them is made, and the view on Poland’s success and the failure of the ‘shock therapy’ in Russia is provided from the perspective of the years since the interventions were realized. What can we learn from the so-called ‘shock therapy’ in Poland and Russia for the issues of economic development and growth.? Why the experience in Poland was successful and in Russia quite the opposite? Looking on the situation through the current days’ perspective, examining the relevant texts and the recollections of participants of the reforms, the conclusion of the preferable holistic approach and ‘customized’ solutions for development is made, and any further ideas on the post-Washington universal solution would be indulged its share of criticism.